J    ATION   AS    AFFECTED 
DISTRIBUTION    OF    GOV- 
ERNMENTAL    POWERS     IN     THE 
CONSTITUTIONS 


LIBRARY 

OF  THE 

UNIVERSITY  OF  CALIFORNIA. 


.  Class 


RATE  REGULATION  AS  AFFECTED 
BY  THE  DISTRIBUTION  OF  GOV- 
ERNMENTAL POWERS  IN  THE 
CONSTITUTIONS 


BY 

ROBERT  P.  REEDER 

Of  the  Philadelphia  Bar 


PHILADELPHIA 
T.  &  J.  W.  JOHNSON  Co. 


GENERAL  r/ 

COPYRIGHT,  1908, 

BY 
ROBERT  P.  REEDER 


RATE   REGULATION  AS  AFFECTED  BY  THE 
DISTRIBUTION  OF  GOVERNMENTAL 
POWERS  IN  THE  CON- 
STITUTIONS 


INTRODUCTORY. 

In  this  article  an  effort  will  be  made  to  show  that,  within 
their  respective  jurisdictions  and  within  constitutional 
bounds,  both  Congress  and  the  state  legislatures  may  limit 
the  charges  for  railroad  transportation,  either  specifically 
or  by  definite  general  rules;  and  that  if  the  legislative  de- 
partment of  government  establishes  such  rules  it  may  em- 
power a  commission  to  name  specific  rates  in  accordance 
therewith;  but  that,  on  the  other  hand,  such  rules  may  be 
established  only  by  the  legislative  department,  and  until 
they  are  so  established  no  commission  may  constitutionally 
ordain  specific  rates.  We  shall,  furthermore,  consider  the 
question  whether  the  statutes  which  empower  commissions 
to  name  specific  rates  do  establish  definite  principles  of 
which  the  commissions  are  simply  called  upon  to  state  the 
specific  applications  or  whether  by  those  statutes  the  at- 
tempt is  made  to  entrust  to  the  commissions  a  discretion 
which  is  so  broad  as  to  be  unconstitutional. 

As  the  rules  of  constitutional  law  which  are  involved 
have  been  frequently  misunderstood  even  by  the  courts 
which  have  endeavored  to  apply  them,  it  will  be  necessary 
to  examine  at  some  length  those  rules  and  the  more  impor- 
tant cases  which  have  arisen  under  them. 


185002 


2  RATE  REGULATION  AND  THE  DISTRIBUTION 

GENERAL  RULE  AS  TO  DISTRIBUTION  OF  POWERS. 

The  United  States  and  the  several  states  have  by  their 
respective  constitutions  made  partial1  distributions  of  the 
powers  of  those  governments  among  three  departments  of 
government.  In  so  doing  they  have  by  implication,  and 
at  times  by  express  words,  declared  that  an  organ  posses- 
sing the  characteristics  of  one  department  shall  not  exer- 
cise powers  which  have  been  entrusted  only  to  another  de- 
partment.2 It  is  this  restraint  which  we  shall  consider  in 
the  present  article. 

Obviously,  the  distributive  clauses  of  the  federal  Consti- 
tution relate  only  to  the  federal  government,3  and  the  dis- 


1  See  page  4,  infra. 

'Cooley,  Constitutional  Limitations,  7th  ed.,  126;  Cooley,  Constitu- 
tional Law,  3d  ed.,  46;  Black,  Constitutional  Law,  2d  ed.,  pp.  78-84; 
Bondy,  The  Separation  of  Governmental  Powers,  (Columbia  University 
Studies)  19-22;  6  A.  &  E.  Enc.  of  L.,  2d  ed.,  1006,  1009;  8  Cyc.  807, 
828,  844,  858;  State  v.  Johnson,  (1900)  61  Kan.  803,  60  Pac.  1068,  49  L. 
R.  A.  662;  Western  U.  T.  Co.  v.  Myatt,  (1899)  98  Fed.  335;  Shephard 
v.  City  of  Wheeling,  (1887)  30  W.  Va.  479,  4  S.  E.  635.  Compare  6 
A.  &  E.  Enc.  of  L.,  2d  ed.,  1007;  State  v.  Bates,  (1905)  96  Minn,  no, 
116,  104  N.  W.  709,  712;  Sawyer  v.  Dooley,  (1893)  21  Nev.  390,  32  Pac. 
437;  and  authorities  cited  in  note  6,  infra;  and  see  Atlantic  E.  Co.  v. 
Wilmington  &>  W.  R.  Co.,  (1892)  in  N.  C.  463,  16  S.  E.  393,  18  L.  R. 
A.  393.  Professor  Dunning,  in  19  Pol.  Sci.  Quar.  487,  claims  that 
Aristotle  did  not  express  the  views  concerning  the  distribution  of  gov- 
ernmental powers  which  later  writers  have  attributed  to  him. — The 
statement  in  the  text  is  obviously  true  as  to  those  constitutions  which 
contain  express  declarations  to  that  effect.  As  to  those  which  do  not 
contain  such  declarations,  it  is  clear  that  one  department  cannot  exercise 
power  which  has  been  entrusted  only  to  another  department  without 
the  consent  of  the  latter.  And  the  question  whether  even  the  consent 
of  the  latter  can  validate  the  exercise  of  a  power  otherwise  than  as 
provided  in  the  constitution  must  be  answered  by  a  consideration  of 
the  purpose  of  those  who  adopted  the  constitutions  when  they  decided 
to  grant  different  governmental  powers  to  different  organs  of  govern- 
ment. 

'  The  United  States  Supreme  Court  said  in  Satterlee  v.  Matthewson, 
(1829)  2  Pet.  380,  413,  "There  is  nothing  in  the  Constitution  of  the 
United  States  which  forbids  the  legislature  of  a  state  to  exercise 
judicial  functions."  See  also  Calder  v.  Bull,  (1798)  3  Ball.  386;  Ran- 
dall v.  Kreiger,  (1874)  23  Wall.  137,  147;  Consolidated  R.  Co.  v. 
State,  (1908)  207  U.  S.  541,  552,  28  Sup.  Ct.  178,  181 ;  Michigan  C.  R. 
Co.  v.  Powers,  (1906)  201  U.  S.  245,  294,  26  Sup.  Ct.  459,  462,  463; 
League  v.  Texas,  (1902)  184  U.  S.  156,  161,  22  Sup.  Ct  475,  477; 


OF   POWERS   IN   THE   CONSTITUTIONS  3 

tributive  clauses  of  the  state  constitutions  relate  only  to  the 
governments  of  the  respective  states.  Yet  whether  we  con- 
sider the  power  of  an  organ  of  the  federal  government  or 
the  power  of  an  organ  of  a  state  government,  the  problems 
involved  will  be  the  same,  for  there  is  a  general  uniformity 
among  the  constitutions,  although,  of  course,  there  are  also 
variations  among  the  constitutions  which  may  prevent  uni- 
form answers  to  those  problems,  and  even  under  similar 
provisions  different  conclusions  may  be  reached  by  the  au- 
thorities of  different  jurisdictions.4 

It  is  true  that  the  actual  distribution  of  powers  is  not 
strictly  logical ;  that,  for  instance,  the  president  or  governor 
exercises  power  which  is  legislative  in  its  character  when 
he  vetoes  legislation,  and  legislative  bodies  exercise  power 
of  a  judicial  nature  when  they  try  cases  of  impeachment 
and  power  of  an  administrative  nature  when  they  consider 
appointments  to  office.5  But  such  constitutional  exceptions, 


Winchester  &  S.  R.  Co.  v.  Commonwealth,  (1906)  106  Va.  264,  267,  269, 
55  S.  E.  692,  693,  694 ;  Bondy,  The  Separation  of  Governmental  Powers, 
(Columbia  University  Studies)  21;  Mobile,  J.  &  K.  C.  R.  Co.  v.  State, 
(1908)  210  U.  S.  187,  202,  28  Sup.  Ct.  650,  655;  Claiborne  Co.  v.  Brooks, 
(1884)  in  U.  S.  400,  410,  4  Sup.  Ct.  489,  494.  The  dates  of  the  cases 
will  be  noted,  however. 

*  Trustees  v.  Saratoga  G.,  E.  L.  6-  P.  Co.,  (1908)  191  N.  Y.  123,  83 
N.  E.  693,  696;  People  v.  Cook,  (1907)  147  Mich.  127,  131,  132,  no 
N.  W.  514,  516;  State  v.  Kline,  (1907)  Ore.,  93  Pac.  237,  239;  Win- 
chester &  S.  R.  Co.  v.  Commonwealth,  (1906)  106  Va.  264,  55  S.  E. 
692;  Wheeler's  Appeal,  (1877)  45  Conn.  306;  McGehee,  Due  Process  of 
Law,  71 ;  Goodnow,  The  Principles  of  the  Administrative  Law  of  the 
United  States,  33,  95;  and  see  remarks  of  Christiancy,  J.,  in  People  v. 
Hurlburt,  (1874)  24  Mich.  44,  63. 

8  On  the  power  of  a  legislature  to  appoint  its  own  subordinate  officers 
and  to  conduct  investigations — which  are  not  acts  of  a  legislative  nature, 
and  on  the  power  of  a  court  to  appoint  its  own  subordinate  officers  and 
to  exercise  analogous  powers — which  are  not  acts  of  a  judicial  nature, 
see  the  discussion  in  Board  of  Comrs.  v.  Gwin,  (1894)  136  Ind.  562, 
36  N.  E.  237;  Goodnow,  The  Principles  of  the  Administrative  Law  of 
the  United  States,  37,  41,  446-448;  Bondy,  The  Separation  of  Govern- 
mental Powers,  (Columbia  University  Studies)  34,  70,  76,  84,  114,  115, 
122,  138;  Black,  Constitutional  Law,  2d  ed.,  p.  76;  In  re  Janitor  of 
Supreme  Court,  (18*74)  35  Wis.  410;  In  re  Chapman,  (1897)  166  U.  S. 
661,  17  Sup.  Ct.  677;  State  v.  Pierre,  (1908)  121  La.,  46  So.  574.  And 
see  6  A.  &  E.  Enc.  of  L.,  2d  ed.,  1007;  21  Harv.  L.  Rev.  161.  Compare 


4  RATE   REGULATION   AND   THE   DISTRIBUTION 

and  even  exceptions,  which  appear  in  some  constitutions, 
which  directly  affect  rate  regulation,  do  not  lessen  the  posi- 
tiveness  of  the  rule  in  unexcepted  cases. 

It  is,  however,  important  that  we  notice  that  the  distri- 
bution of  powers  is  not  complete,  so  that  while  some  powers 
may  be  exercised  only  by  the  legislature,  others  only  by  an 
administrative  organ,  and  still  others  only  by  the  courts, 
there  are  also  powers  which  are  not  definitely  assigned  by 
the  constitutions  and  which  may,  therefore,  be  exercised  by 
the  legislature  itself  or  be  assigned  by  it  to  one  of  the  other 
departments.6  Moreover,  the  legislature  may  grant  some 
self-government  to  the  localities.7  In  so  doing  it  is  not 


the  authorities  cited  in  note  22,  infra.  The  actual  decision  in  Kilbourn 
v.  Thompson,  (1880)  103  U.  S.  168,  was  simply  that  the  federal  House 
of  Representatives  did  not  have  authority  to  make  the  particular  inves- 
tigation there  considered. 

8  See  Cooley,  Constitutional  Law,  3d  ed.,  45,  46 ;  Bondy,  The  Separa- 
tion of  Governmental  Powers,  (Columbia  University  Studies)  79,  80; 
Stevens,  Sources  of  the  Constitution  of  the  United  States,  49;  Toncray 
v.  Budge,  (1908)  Idaho,  95  Pac.  26;  Incorporated  Village  of  Fairview  v. 
Giffee,  (1905)  73  Ohio  St.  183,  76  N.  E.  865;  State  v.  Struble,  (1905)  19 
S.  D.  646,  104  N.  W.  465;  State  v.  Bates,  (1905)  96  Minn,  no,  104 
N.  W.  709;  Paul  v.  Glouceste-  County,  (1888)  50  N.  J.  L.  585,  611,  15 
Atl.  272,  284;  Brown  v.  Turner,  (1874)  70  N.  C.  93,  102;  6  A.  &  E.  Enc. 
of  L.,  2d  ed.,  1007;  Ross  v.  Whitman,  (1856)  6  Cal.  361;  Opinion  of 
Justices,  (1885)  138  Mass.  601 ;  page  10,  infra,  and  note  66,  infra.  And 
there  are  powers  which  other  organs  may  exercise  until  forbidden  by 
the  legislature :  see,  e.  g.,  8  A.  &  E.  Enc.  of  L.,  2d  ed.,  29,  30 ;  compare 
note  22,  infra. 

T  Cooley,  Constitutional  Limitations,  7th  ed.,  165,  172,  263,  264;  8  Cyc. 
837;  6  A.  &  E.  Enc.  of  L.,  2d  ed.,  1027,  1024;  28  id.  160;  Dillon,  Mu- 
nicipal Corporations,  4th  ed.,  sec.  308;  Goodnow,  The  Principles  of  the 
Administrative  Law  of  the  United  States,  37 ;  and  see  Oberholtzer,  The 
Referendum  in  America,  324,  332,  334;  Sutherland,  Statutory  Con- 
struction, 2d  ed.,  p.  170.  Compare  Elliott  v.  City  of  Detroit,  (1899)  121 
Mich.  611,  84  N.  W.  820;  In  re  Municipal  Suffrage  to  Women,  (1894) 
160  Mass.  586,  36  N.  E.  488,  23  L.  R.  A.  113;  Bradshaw  v.  Lank  ford, 
(1891)  73  Md.  428,  21  Atl.  66,  n  L.  R.  A.  582;  Sling er  v.  Henneman, 
(1875)  38  Wis.  504;  Burton  v.  Dupree,  (1898)  19  Tex.  Civ.  App.  275, 
46  S.  W.  272.  Congress  may  grant  local,  but  only  local,  powers  to  the 
territories:  see  Stoutenburgh  v.  Hennick,  (1899)  129  U.  S.  141,  9  Sup. 
Ct.  256;  and  also  McCornick  v.  Western  U.  T.  Co.,  (1897)  79  Fed. 
449,  45i;  Ansley  v.  Ainsworth,  (1902)  4  Ind.  Ter.  308,  69  S.  W.  884. 
It  seems  that  there  would  be  less  "refinement  of  reasoning"  (see  In  re 
Rahrer,  (1891)  140  U.  S.  545,  562,  11  Sup.  Ct.  865,  869)  in  sustaining 


OF   POWERS   IN   THE   CONSTITUTIONS  5 

reassigning  power  which  has  been  entrusted  exclusively  to 
itself,  for  such  limited  power  has  been  constantly  granted  to 
local  authorities  from  time  immemorial,  and  the  general 
language  of  the  constitutions  is  interpreted  in  accordance 
with  this  custom,  since  contemporary  history  does  not  fur- 
nish any  reason  for  thinking  that  those  who  adopted  the 
constitutions  intended  to  abolish  the  custom.  And,  of 
course,  the  fact  that  a  constitution  assigns  a  given  power 
to  one  organ  of  the  central  government  does  not  of  itself 
oblige  the  legislature  when  it  bestows  a  similar  power  over 
strictly  local  matters  upon  an  organ  of  local  government  to 
bestow  it  upon  a  similar  organ.8 


local  option  and  similar  laws  upon  the  ground  given  in  the  text  than 
in  sustaining  them  upon  the  ground  which  is  usually  given:  Paul  v. 
Gloucester  County,  (1888)  50  N.  J.  L.  585,  594,  600,  603,  604,  15  Atl. 
272,  276,  279,  280;  and  see  Oberholtzer,  The  Referendum  in  America, 
208-217,  324;  Cooley,  Constitutional  Limitations,  7th  ed.,  168,  169. 
Compare  Field  v.  Clark,  (1892)  143  U.  S.  649,  694,  12  Sup.  Ct.  495,  505; 
Sutherland,  Statutory  Construction,  2d  ed.,  p.  173;  Oberholtzer,  op.  cit., 
324,  328;  Evers  v.  Hudson,  (1907)  Mont.,  92  Pac.  462,  466,  467;  Pouts  v. 
Hood  River,  (1905)  46  Ore.  492,  81  Pac.  370,  I  L.  R.  A.  N.  S.  483; 
McGonnell's  License,  (1904)  209  Pa.  327,  58  Atl.  615;  Locke's  Appeal, 
(1873)  72  Pa.  St.  491,  508.  On  the  other  hand,  it  is  submitted  that  dele- 
gations of  power  to  state  boards  cannot  properly  be  based  upon  this 
exception  to  the  general  rule,  however  defensible  they  may  sometimes 
be  upon  another  ground.  Consider  Brodbine  v.  Revere,  (1903)  182 
Mass.  598,  66  N.  E.  607;  People  v.  Harper,  (1878)  91  111.  357,  370; 
Pierce  v.  Doolittle,  (1906)  130  Iowa,  333,  336,  106  N.  W.  751,  752,  6 
L.  R.  A.  N.  S.  143,  145;  Tilley  v.  Savannah,  F.  &  W.  R.  Co.,  (1881) 
5  Fed.  641,  657 ;  19  Harv.  L.  Rev.  203 ;  20  Harv.  L.  Rev.  147. 

. ^  *  People  v.  P ravines,   (1868)  34  Cal.  520,  532;  Eckerson  v.  City  of 

Des  MoirieT~Ti988Y'[ovfa~ "115  N.  W.  177,  182;  Staude  v.  Board  of 
Election  Comrs.,  (1882)  61  Cal.  313,  322;  see  also  Commonwealth  v. 
Collier,  (1905)  213  Pa.  138,  62  Atl.  567;  Muhlenberg  Co.  v.  Morehead, 
(1898)  20  Ky.  L.  Rep.  376,  46  S.  W.  484;  Pennington  v.  Woolfolk, 
(1880)  79  Ky.  13;  Terre  Haute  v.  Evansville  &  T.  H.  R.  Co.,  (1897)  149 
Ind.  174,  46  N.  E.  77,  37  L.  R.  A.  189;  Fox  v.  McDonald,  (1893)  101 
Ala.  51,  69,  13  So.  416,  419;  Bondy,  The  Separation  of  Governmental 
Powers,  (Columbia  University  Studies)  179,  183;  Goodnow,  The  Prin- 
ciples of  the  Administrative  Law  of  the  United  States,  35-37 ;  and  cases 
there  cited.  Compare  State  v.  Armstrong,  (1907)  Miss.,  44  So.  809; 
Mayor  v.  Dechert,  (1870)  32  Md.  369;  and  also  Trustees  v.  Saratoga 
G.,  E.  L.  6-  P.  Co.,  (1908)  191  N.  Y.  123,  83  N.  E.  693,  696, 


6  RATE  REGULATION  AND  THE  DISTRIBUTION 

EXTENT  OF  POWER  OF  LEGISLATURE. 

At  the  time  of  the  American  Revolution  the  British  Par- 
liament had  absolute  power  over  the  persons  and  political 
institutions  under  British  control,  subject  only  to  a  veto 
power.9  By  the  Revolution  the  state  legislatures  acquired 
similar  power  over  the  persons  and  political  institutions  of 
their  states,  subject  to  gubernatorial  veto,  although  consti- 
tutions soon  limited  their  powers  and  placed  some  powers 
in  the  hands  of  other  governmental  organs  beyond  the 
reach  of  legislative  exercise  or  control.10  And  while  Con- 
gress can  deal  only  with  subject-matters  entrusted  to  it,11 


*  See  Blackstone,  Commentaries,  I,  *QI,  *i6o-*i62 ;  Lee  v.  Bude  & 
T.  J.  Ry.  Co.,  (1871)  L.  R.  6  C.  P.  576,  582;  Courtney,  The  Working 
Constitution  of  the  United  Kingdom,  4;  Dicey,  The  Law  of  the  Consti- 
tution, 6th  ed.,  58  et  seq.;  Hurtado  v.  People,  (1884)  no  U.  S.  516,  531, 
4  Sup.  Ct.  in,  292,  119;  Slaughter  House  Cases,  (1872)  16  Wall.  36,  65. 
That  veto  power  has  not  been  exercised  since  1707:  Anson,  The  Law 
and  Custom  of  the  Constitution,  3d  ed.,  I,  301. 

""The  legislative  power  is  the  supreme  authority  except  as  limited 
by  the  constitution  of  the  state,  and  the  sovereignty  of  the  people  is 
exercised  through  their  representatives  in  the  legislature  unless  by  the 
fundamental  law  power  is  elsewhere  reposed:"  McPherson  v.  Blacker, 
(1892)  146  U.  S.  i,  25,  13  Sup.  Ct.  3,  7.  See  also  Northwestern  N.  L. 
I.  Co.  v.  Riggs,  (1906)  203  U.  S.  243,  253,  27  Sup.  Ct.  126,  128;  Suther- 
land, Statutory  Construction,  2d  ed.,  sec.  81 ;  Patterson,  The  United 
States  and  the  States  Under  the  Constitution,  2d  ed.,  p.  2;  Cooley, 
Constitutional  Limitations,  7th  ed.,  128,  233,  236,  241 ;  6  A.  &  E.  Enc.  of 
L.,  2d  ed.,  934 ;  8  Cyc.  775 ;  Black,  Constitutional  Law,  2d  ed.,  pp.  63,  64 ; 
Sedgwick,  Construction  of  Statutory  and  Constitutional  Law,  2d  ed., 
154;  Goodnow,  The  Principles  of  the  Administrative  Law  of  the  United 
States,  40;  7  Harv.  L.  Rev.  422;  32  Am.  L.  Reg.  N.  S.  1093,  1097; 
Dorman  v.  State,  (1859)  34  Ala.  216;  Thorpe  v.  Rutland  &  B.  R.  Co., 
(1854)  27  Vt.  140;  Redell  v.  Moores,  (1901)  63  Neb.  219,  230,  231,  88 
N.  W.  243,  247,  55  L.  R.  A.  740,  744,  745 ;  State  v.  Missouri  P.  Ry.  Co., 
(1907)  Kan.,  92  Pac.  606,  613;  Ratcliff  v.  Wichita  U.  S.  Co.,  (1906)  74 
Kan.  i,  16,  86  Pac.  150,  155;  State  v.  Fountain,  (1908)  Del.,  69  Atl.  926, 
930;  Hardens  F.  S.  &•  F.  Co.  v.  Chicago,  (1908)  111.,  85  N.  E.  245,  247; 
dissenting  opinion  in  Abbott  v.  Bedding  field,  (1899)  125  N.  C.  256,  268, 
272,  34  S.  E.  412,  415,  416;  21  Harv.  L.  Rev.  383;  Century  and  American 
Digests,  Const  Law,  II,  B,  Grant  or  limitation  of  power.  On  the 
effect  of  a  grant  of  power  to  legislate  see  note  13,  infra.  With  authori- 
ties in  this  note  compare  State  v.  Moores,  (1898)  55  Neb.  480,  490,  76 
N.  W.  175,  177,  41  L.  R.  A.  624,  627,  and  authorities  there  cited  (which 
case  was  overruled  in  Redell  v.  Moores,  supra);  32  Am.  L.  Reg.  N.  S. 
3,  784,  971,  1064;  13  Harv.  L.  Rev.  441;  Report  of  Pennsylvania  Bar 
Assn.,  VI,  251. 

u  Hodges  v.  United  States,  (1906)  203  U.  S.  i,  16,  27  Sup.  Ct.  6,  8; 


OF   POWERS  IN   THE   CONSTITUTIONS  7 

except  in  regard  to  the  territories,12  as  to  such  subject- 
matters  its  general  power  is  the  same  as  that  of  state  leg- 
islatures over  subject-matters  not  removed  from  their  con- 
trol,13 though  it  also  is  under  express  restrictions  and  some 
governmental  powers  have  been  placed  beyond  its  exercise 
or  control.  In  other  words,  the  state  legislatures,  over  sub- 
ject-matters not  withdrawn  from  their  control,  and  Con- 
gress, over  subject-matters  entrusted  to  it,  have  all  govern- 
mental powers  not  entrusted  by  the  constitutions  to  other 
organs  of  government  and  not  withdrawn  from  the  con- 
trol of  those  legislative  bodies  by  other  provisions  of  the 
constitutions. 

It  is,  therefore,  clear  that  legislative  bodies  may  determine 
the  principles  upon  which  railroad  charges  shall  be  based 
and  may  themselves  ordain  specific  schedules  of  rates  for 
future  transportation,  unless  those  powers,  or  either  of 
them,  have  been  entrusted  exclusively  to  another  organ  of 
government  by  the  constitutional  provisions  which  assign 
judicial  powers  to  the  courts  or  by  those  which  assign  ad- 
ministrative powers  to  administrative  organs,  or  unless  the 
legislatures  are  restrained  by  other  constitutional  provisions 
which  we  need  not  here  consider. 

The  question  whether  a  legislature  in  making  enactments 
of  the  character  referred  to  would  entrench  upon  the  power 


United  States  v.  Harris,  (1883)  106  U.  S.  629,  635,  I  Sup.  Ct.  601,  606; 
Kansas  v.  Colorado,  (1907)  206  U.  S.  46,  81,  87,  88,  89,  92,  27  Sup.  Ct. 
655,661,663,664,665. 

"National  Bank  v.  County  of  Yankton,  (1879)  101  U.  S.  129; 
Utter  v.  Franklin,  (1899)  172  U.  S.  416,  423,  19  Sup.  Ct.  183,  186; 
Mormon  Church  v.  United  States,  (1890)  136  U.  S.  I,  42,  43,  10  Sup. 
Ct.  792,  802,  803.  See  also  De  Lima  v.  Bidwell,  (1901)  182  U.  S.  I, 
196,  21  Sup.  Ct.  743,  753;  Shively  v.  Bpwlby,  (1894)  152  U.  S.  i,  48,  14 
Sup.  Ct.  548,  566;  Patterson,  The  United  States  and  the  States  Under 
the  Constitution,  2d  ed.,  pp.  8,  9. 

18  See  Patterson,  The  United  States  and  the  States  Under  the  Con- 
stitution, 2d  ed.,  p.  17;  Juilliard  v.  Greenman,  (1884)  no  U.  S.  421, 
447-450,  4  Sup.  Ct.  122,  129-131;  Burton  v.  United  States,  (1906)  202 
U.  S.  344,  366,  367,  26  Sup.  Ct.  688,  693;  Chinese  Exclusion  Case,  (1889) 
130  U.  S.  581,  603,  604,  9  Sup.  Ct.  623,  629;  Gibbons  v.  Ogden,  (1824) 
9  Wheat,  i,  196,  197;  McMurtrie,  Observations  on  Mr.  George  Ban- 
croft's Plea  for  the  Constitution,  24,  25. 


8  RATE   REGULATION   AND   THE   DISTRIBUTION 

of  an  administrative  organ  has  apparently  never  arisen, 
and  it  is  doubtful  whether  such  a  contention  will  ever  be 
made.  We  must,  however,  consider  the  question  whether 
legislative  enactments  of  that  character  would  entrench 
upon  the  power  of  the  courts. 

It  is  true  that,  in  the  absence  of  statute,  the  courts  may, 
in  cases  properly  before  them,  determine  the  amount  which 
a  common  carrier  may  charge  for  services  rendered  by  it.14 
But  there  is  a  clear  distinction  between  applying  an  exist- 
ing rule  of  law  (in  that  case  the  common  law)  and  adopt- 
ing a  new  and  possibly  different  rule  of  law  for  relations 
which  may  exist  in  the  future.15  The  legislature,  in  reg- 
ulating rates,  is  not  deciding  what  the  rights  of  parties  are 
at  the  time  the  schedule  is  enacted.  It  is  not  interpreting 
the  common  law.  It  is  adopting  for  the  future  a  rule  which 
supersedes  that  law. 

And  certainly  the  legislature  may  change  the  common 
law.16  The  only  legal  restrictions  upon  legislative  action 


"Stern  v.  Metropolitan  T.  &  T.  Co.,  (1897)  46  N.  Y.  Supp.  no, 
19  N.  Y.  App.  Div.  316;  Cook  6-  Wheeler  v.  Chicago,  R.  I.  &  P.  Ry. 
Co.,  (1890)  81  Iowa,  551,  46  N.  W.  1080,  9  L.  R.  A.  764;  Menacho  v. 
Ward,  (1886)  27  Fed.  529.  Even  without  such  decisions,  it  would  seem 
to  follow  from  the  fact  that  a  common  carrier  cannot  refuse  to  carry : 
Jackson  v.  Rogers,  (1683)  2  Show.  327,  that  the  carrier  cannot  escape 
this  duty  by  charging  whatever  it  pleases. 

""It  is  one  thing  to  inquire  whether  the  rates  which  have  been 
charged  and  collected  are  reasonable — that  is  a  judicial  act;  but  an 
entirely  different  thing  to  prescribe  rates  which  shall  be  charged  in  the 
future — that  is  a  legislative  act:"  Interstate  Com.  Comn.  v.  Cincinnati, 
N.  O.  &  T.  P.  Ry.  Co.,  (1897)  167  U.  S.  479,  499,  17  Sup.  Ct.  896,  900. 
See  also  167  U.  S.  505,  17  Sup.  Ct.  902 ;  McChord  v.  Louisville  6-  N.  R. 
Co.,  (1902)  183  U.  S.  483,  495,  22  Sup.  Ct.  165,  169;  State  v.  Johnson, 
(1900)  61  Kan.  803,  60  Pac.  1068,  49  L.  R.  A.  662;  Western  U.  T.  Co. 
v.  Myatt,  (1899)  98  Fed.  335;  Shephard  v.  City  of  Wheeling,  (1887)  30 
W.  Va.  479,  4  S.  E.  635.  Cases  sustaining  legislative  regulation  are 
cited  in  Atlantic  C.  L.  R.  Co.  v.  North  C.  Corp.  Comn.,  (1907)  206  U.  S. 
i,  19,  27  Sup.  Ct.  585,  591- 

"See  Munn  v.  Illinois,  (1876)  94  U.  S.  113,  134;  West  v.  Louisiana, 
(1904)  194  U.  S.  258,  262,  24  Sup.  Ct.  650,  652;  Dilworth  v.  Schuylkill 
I.  L.  Co.,  (1908)  219  Pa.  527,  530,  69  Atl.  47,  48;  Sutherland  v.  Gov- 
ernor, (1874)  29  Mich.  320,  325,  326;  Blackstone,  Commentaries,  I,  *89; 
6  A.  &  E.  Enc.  of  L.,  2d  ed.,  1034,  1035 ;  and  notes  9  and  10,  supra.  In 
Reagan  v.  Farmers'  L.  &  T.  Co.,  (1894)  154  U.  S.  362,  397,  14  Sup.  Ct. 
1047,  1054,  the  court,  after  saying  correctly,  "It  is  doubtless  true,  as  a 
general  proposition,  that  the  formation  of  a  tariff  of  charges  for  the 


OF    POWERS   IN    THE   CONSTITUTIONS  9 

are  those  imposed  by  the  constitutions.  If  a  principle  of 
the  common  law  has  been  inserted  in  the  constitutions  it  is 
binding  upon  the  legislatures  not  as  a  principle  of  the  com- 
mon law  but  as  a  provision  of  the  constitutions.  And  the 
fact  that  courts  enforce  compliance  with  some  constitutional 
provisions  certainly  does  not  show  that  rate  regulation  is 
judicial  in  its  nature.17 

Nor  do  the  constitutional  provisions  now  under  consid- 
eration oblige  the  legislature  to  state  merely  general  prin- 
ciples and  leave  to  the  courts  the  statement  of  the  appli- 
cation of  those  principles  to  particular  circumstances  which 
may  exist  thereafter.  The  legislature  may  do  so,  unques- 


transportation  by  a  common  carrier  of  persons  or  property  is  a  legis- 
lative or  administrative  rather  than  a  judicial  function,"  goes  on  to  say, 
"Yet  it  has  always  been  recognized  that,  if  a  carrier  attempted  to  charge 
a  shipper  an  unreasonable  sum,  the  courts  had  jurisdiction  to  inquire 
into  that  matter  and  to  award  to  the  shipper  any  amount  exacted  from 
him  in  excess  of  a  reasonable  rate ;  and  also  in  a  reverse  case  to  render 
judgment  in  favor  of  the  carrier  for  the  amount  found  to  be  a  reason- 
able charge.  The  province  of  the  courts  is  not  changed,  nor  the  limits 
of  judicial  inquiry  altered,  because  the  legislature  instead  of  the  carrier 
prescribes  the  rates."  This  reference  to  the  common  law  as  furnishing 
a  ground  for  judicial  inquiry  into  the  propriety  of  rates  named  by  a 
governmental  authority  is  clearly  inappropriate.  And  the  reason  given 
for  the  decision  in  Chicago,  M.  &  St.  P.  Ry.  Co.  v.  Minnesota,  (1890) 
134  U.  S.  418,  10  Sup.  Ct.  462,  702,  is  likewise  unsound.  See  Noyes, 
American  Railroad  Rates,  250;  Steenerson  v.  Great  N.  Ry.  Co.,  (1897) 
69  Minn.  353,  375,  72  N.  W.  713,  716;  San  Diego  L.  &  T.  Co.  v. 
National  City,  (1899)  174  U.  S.  739,  754,  19  Sup.  Ct.  804,  810. 

"  The  court  of  last  resort  said  in  Monongahela  N.  Co.  v.  United 
States,  (1893)  148  U.  S.  312,  327,  13  Sup.  Ct.  622,  626,  that  the  amount 
of  compensation  to  which  the  owner  of  property  taken  by  the  federal 
government  is  entitled  is,  in  view  of  the  just  compensation  provision 
of  the  Fifth  Amendment,  strictly  a  judicial  question.  It  is  submitted 
that  this  statement  is  incorrect  and  that  in  any  event  it  is  inapplicable 
to  rate  regulation.  Conceding  that  if  the  owner  be  not  given  what  the 
court  considers  just  compensation  the  court  may  declare  the  taking 
unconstitutional,  it  certainly  doer  not  follow  that  the  court  may  fix 
the  amount  of  compensation  in  the  first  instance  or  may  apply  any  but 
constitutional  tests  to  the  amount  fixed.  Indeed,  the  court  also  said  in 
the  same  opinion  that  the  decision  of  Congress  is  not  conclusive, 
although  without  recognizing  that  this  position  is  far  different  from  the 
one  already  referred  to.  And  even  if  the  court  had  actually  decided  the 
case  in  accordance  with  its  extremest  language,  we  should  still  have 
many  earlier  and  later  declarations  by  the  same  court  that  the  prescrib- 
ing of  future  rates  is  a  legislative  or  administrative  act.  See,  e.  g., 
Chicago,  M.  &  St.  P.  Ry.  Co.  v.  Tompkins,  (1900)  176  U.  S.  167,  173, 
20  Sup.  Ct.  336,  338,  and  notes  15,  supra,  and  41,  55  and  56,  infra. 


10  RATE   REGULATION   AND   THE   DISTRIBUTION 

tionably,  but  it  is  not  obliged  to  do  so.  The  power  of  legis- 
lative bodies  to  enact  detailed  legislation,  unless  expressly 
forbidden  by  other  provisions  of  the  constitutions,  is  too 
well  recognized  to  be  open  to  dispute.  If  the  legislature 
does  not  attempt  to  determine  whether  the  conduct  of  in- 
dividuals complies  with  regulations  which  it  has  laid  down, 
it  does  not  infringe  upon  any  power  which  is  bestowed  ex- 
clusively upon  the  courts  by  the  constitutional  provisions 
which  grant  to  them  judicial  power. 

In  addition  to  the  regulative  power  which  may  be  exer- 
cised only  by  the  legislature18  (except  in  so  far  as  that 
body  authorizes  local  self-government)19  the  legislature  pos- 
sesses powers  which  other  organs  of  government  may  ex- 
ercise but  may  not  exercise  exclusively :  thus  there  are  many 
administrative  regulations  which  it  may  enact  itself  or  the 
making  of  which  it  may  entrust  to  administrative  organs,20 
and  it  may,  within  limits  which  we  need  not  here  consider, 
make  regulations  concerning  the  internal  organization  and 
methods  of  operation  of  both  administrative21  and  judicial22 
organs,  or  it  may  entrust  that  power  to  the  organs  con- 
cerned.23 


"  See  note  26,  infra. 

"  See  note  7,  supra. 

10  See  note  6,  supra,  and  the  discussion  of  delegation  of  power,  infra. 

21  See  Goodnow,  The  Principles  of  the  Administrative  Law  of  the 
United  States,  123,  125. 

22  Brown  on  Jurisdiction,  sec.   14 ;   Wigmore  on  Evidence,  sees.   7> 
T353»  !354    >  Bondy,  The  Separation  of  Governmental   Powers,    (Col- 
umbia University  Studies)  31,  100;  Banks  v.  State,  (1905)   124  Ga.  15, 
52  S.  K  74;  State  v.  Barrett,  (1905)  138  N.  C.  630,  50  S.  E.  506,  I  L.  R. 
A.  N.  S.  626;  In  the  Matter  of  the  Estate  of  Stilwell,  (1893)  139  N.  Y. 
337,  34  N.  E.  777;  Whiting  v.  Townsend,  (1881)  57  Cal.  515;  Cooper's 
Case,  (1860)  22  N.  Y.  67,  90;  note  5,  supra.  See  also  State  v.  Pierre, 
(1908)    121  La.,  46  So.  574;  Memphis  St.  Ry.   Co.  v.  Byrne,    (1907) 
Tenn.,  104  S.  W.  460,  470;  People  v.  Hayne,  (1890)  83  Cal.  in,  23  Pac. 
i,  7  L.  R.  A.  348;  Brady  v.  Carter et  R.  Co.,  (1907)  70  N.  J.  E.  748,  67 
Atl.  606.    Compare  In  re  Day,  (1899)   181  111.  73,  54  N.  E.  646,  50  L. 
R.  A.  519;  Herndon  v.  Imperial  F.  I.  Co.,   (1892)    in   N.  C.  384,   16 
S.  E.  465,  18  L.  R.  A.  547;  State  v.  Noble,  (1889)   118  Ind.  350,  21  N. 
E.  244,  4  L.  R.  A.  101;  Houston  v.  Williams,  (1859)   *3  Cal.  24;  Cal- 
vert  v.  Carstarphen,  (1903)  133  N.  C.  25,  45  S.  E.  353;  Ex  parte  Grif- 
fiths, (1889)  118  Ind.  83,  20  N.  E.  513,  3  L.  R.  A.  398;  Bondy,  op.  cit., 
168;  and  also  In  re  Janitor  of  Supreme  Court,  (1874)  35  Wis.  410. 

*  Way  man  v.  Southard,  (1825)  10  Wheat  I,  42,  43,  46;  Bank  of  the 


OF  POWERS  IN  THE  CONSTITUTIONS  II 

LIMITED  POWER  OF  ADMINISTRATIVE  ORGANS. 

Administrative  organs  possess  only  the  powers  which 
have  been  entrusted  to  them  by  a  constitution  or  by  legisla- 
tion.24 Passing  over  clear  grants  of  power  by  the  consti- 
tutions with  the  remark  that  they  may  confer  upon  organs 
which  are  granted  administrative  power  more  than  merely 
administrative  power,  and  that  in  such  cases  decisions  con- 
cerning merely  administrative  bodies  may  be  inapplicable  to 
such  organs,  and,  conversely,  decisions  concerning  them 
may  be  inapplicable  to  merely  administrative  organs,  we 
shall  inquire  simply  what  portion  of  the  power  which  may 
be  exercised  by  the  legislature  may  be  granted  by  the  legis- 
lature to  administrative  bodies  without  infringing  the  dis- 
tribution of  powers  which  is  usually  made  by  the  constitu- 
tions. 

DELEGATION  OF  POWER  BY  LEGISLATURE. 

The  courts  have  frequently  determined  that,  except  with 
reference  to  local  affairs,25  a  legislature  may  not  delegate 


U.  S.  v.  Halstead,  (1825)  10  Wheat.  51,  61;  Hudson  v.  Parker,  (1895) 
156  U.  S.  277,  15  Sup.  Ct.  450;  Cooke  v.  Avery,  (1893)  147  U.  S.  375,  13 
Sup.  Ct.  340;  Stevens  v.  Truman,  (1899)  127  Cal.  155,  59  Pac.  397; 
White  v.  Toledo,  St.  L.  &  K.  C.  R.  Co.,  (1897)  79  Fed.  133 ;  Winston  v. 
Stone,  (1897)  102  Ky.  423,  43  S.  W.  397;  Anderson  v.  Levely,  (1882) 
58  Md.  192;  Thompson  v.  Floyd,  (1855)  2  Jones'  L.  (N.  C.)  313.  See 
also  State  v.  Struble,  (1905)  19  S.  D.  646,  104  N.  W.  465;  Atlantic  E. 
Co.  v.  Wilmington  &  W.  R.  Co.,  (1892)  in  N.  C.  463,  16  S.  E.  393, 
18  L.  R.  A.  393;  Hildreth  v.  Crawford,  (1884)  65  Iowa,  339,  343; 
Coleman  v.  Newby,  (1871)  7  Kan.  82;  8  Cyc.  835;  note  6,  supra. 

2*  See  Interstate  Com.  Comn.  v.  Cincinnati,  N.  O.  &  T.  P.  Ry.  Co., 
(1897)  167  U.  S.  479,  17  Sup.  Ct.  896;  Interstate  Com.  Comn.  v. 
Alabama  M.  Ry.  Co.,  (1897)  168  U.  S.  144,  18  Sup.  Ct.  45;  Board  of  R. 
Comrs.  v.  Oregon  Ry.  &  Nav.  Co.,  (1888)  17  Ore.  65,  19  Pac.  702,  2  L. 
R.  A.  195;  United  States  v.  Eaton,  (1892)  144  U.  S.  677,  12  Sup.  Ct.  764; 
Morrill  v.  Jones,  (1883)  106  U.  S.  466,  I  Sup.  Ct.  423;  23  A.  &  E.  Enc. 
of  L.,  2d  ed.,  653 ;  Goodnow,  The  Principles  of  the  Administrative  Law 
of  the  United  States,  46,  47,  95;  People  v.  Healy,  (1907)  231  111.  629, 
83  N.  E.  453. 

25  On  the  power  of  the  legislature  to  allow  localities  to  govern  them- 
selves in  some  respects,  see  note  7,  supra.  That  administrative  and 
judicial  organs  may  be  allowed  to  make  regulations  concerning  their 
own  internal  organization  and  methods  of  operation  (see  note  23, 
supra)  hardly  seems  to  be  an  exception  to  the  general  rule. 


12  RATE  REGULATION  AND  THE  DISTRIBUTION 

its  power  of  deciding  questions  of  public  policy,26  and  in 
this  article  the  validity  of  that  rule  will  be  assumed.27  On 
the  other  hand,  although  rate  regulation  may  involve  ques- 

28  In  the  following  cases  among  others  it  has  been  actually  decided 
that  power  which  is  strictly  legislative  may  not  be  delegated,  and  there 
are  dicta  to  that  effect  in  many  other  cases:  Central  of  Ga.  Ry.  Co.  v. 
Railroad  Comn.,  (1908)  161  Fed.  925,  985  (where  the  statute  dealt  with 
rate-making  by  commission)  ;  State  v.  Great  N.  Ry.  Co.,  (1907)  100 
Minn.  445,  in  N.  W.  289;  Vallelly  v.  Board  of  Park  Comrs.,  (1907)  N. 
D.,  in  N.  W.  615;  United  States  v.  Matthews,  (1906)  146  Fed.  306; 


/V.  941, 

D.  532,  105  N.  W.  724;  King  v.  Concordia  F.  I.  Co.,  (1905)  140  Mich. 
258,  103  N.  W.  616;  Phoenix  I.  Co.  v.  Perkins,  (1905)  19  S.  D.  59, 
101  N.  W.  uio;  State  v.  Rogers,  (1905)  71  Ohio  St.  203,  73  N.  E.  461 ; 
Mitchell  v.  State,  (1902)  134  Ala.  392,  32  So.  687;  Gilhooly  v.  City  of 
Elizabeth,  (1901)  66  N.  J.  L.  484,  49  Atl.  1106;  Noel  v.  People,  (1900) 
187  111.  587,  58  N.  E.  616;  Johnstown  C.  Assn.  v.  Parker,  (1899)  45 
N.  Y.  App.  Div.  55,  60  N.  Y.  Supp  1015;  Inhabitants  of  Township  of 
Bernards  v.  Allen,  (1898)  61  N.  J.  L.  228,  39  Atl.  716;  In  re  Incorpora- 
tion of  North  Milwaukee,  (1896)  93  Wis.  616,  67  N.  W.  1033;  D  owl- 
ing  v.  Lancashire  I.  Co.,  (1896)  92  Wis.  63,  65  N.  W.  738;  Hovey  v. 
Commissioners  of  Wyandotte  Co.,  (1896)  56  Kan.  577,  44  Pac.  17; 
Anderson  v.  Manchester  F.  A.  Co.,  (1895)  59  Minn.  182,  191,  63  N.  W. 
241,  28  L.  R.  A.  609,  610;  O'Neil  v.  American  F.  I.  Co.,  (1895)  166  Pa. 
72,  30  Atl.  943,  26  L.  R.  A.  715;  State  v.  Gaster,  (1893)  45  La.  An. 
636,  12  So.  739;  Board  of  Harbor  Comrs.  v.  Excelsior  R.  Co.,  (1891) 
88  Cal.  491,  26  Pac.  375;  King  v.  Tennessee,  (1889)  87  Tenn.  304,  10  S. 
W.  509,  3  L.  R.  A.  210;  Ex  parte  Cox,  (1883)  63  Cal.  21;  Pilkey  v. 
Gleason,  (1856)  i  Iowa,  522;  Barto  v.  Himrod,  (1853)  8  N.  Y.  483; 
State  v.  Field,  (1853)  J7  Mo.  529.  See  also  Commonwealth  v.  Addams, 
(1894)  95  Ky.  588,  26  S.  W.  581;  State  v.  Gaunt,  (1885)  13  Ore.  115, 
9  Pac.  55;  Kehler  &  Bro.  v.  Jack  M.  Co.,  (1876)  55  Ga.  639;  and  end 
of  note  2,  supra.  But,  of  course,  the  fact  that  Locke  (On  Civil  Gov- 
ernment, sec.  142)  declared  broadly  that  a  legislature  may  not  trans- 
fer the  power  of  making  laws,  while  it  may  cast  some  light  upon  the 
intentions  of  those  who  long  afterwards  adopted  the  American  con- 
stitutions, does  not  except  for  that  purpose  have  any  value  whatever. 
Concerning  Locke's  book  see  also  Stephen,  Horae  Sabbaticae,  II,  155, 
156. 

"The  rule  can  be  based  only  upon  the  purpose  of  those  who,  in 
adopting  the  constitutions,  distributed  governmental  powers.  This  pur- 
pose the  courts  have  usually  sought  by  reading  the  distributive  clauses 
not  in  the  light  of  political  theories  predominant  when  the  constitutions 
were  adopted  but  in  the  light  of  the  common  law  principle  that  an 
agent  may  not  delegate  his  powers,  although  the  state  legislatures,  and 
apparently  Congress,  resemble  Parliament  more  closely  than  they  re- 
semble mere  agents.  And,  since  the  legislature  may  delegate  some  of 
its  powers :  see  notes  6,  23,  supra,  and  29,  59,  69,  et  seq.,  infra,  the 
common  law  does  not  furnish  a  complete  interpretation  of  the  pro- 
visions.— The  men  who  adopted  the  various  constitutions  were  in- 
fluenced by  a  theory  which  was  based  upon  an  appreciative  generaliza- 
tion of  governmental  conditions  which,  as  some  of  those  who  adopted 


OF   POWERS  IN   THE   CONSTITUTIONS  13 

tions  of  public  policy,28  there  are  decisions  that  at  least 
some  specific  rates  named  by  commission  are  valid.29 

the  constitutions  realized,  did  not  fully  accord  with  that  generalization ; 
and  in  many  of  the  constitutions  it  is  not  clear  how  closely  those  who 
adopted  them  intended  that  theory  to  be  followed  in  interpreting 
general  provisions.  See  The  Federalist,  Nos.  47  et  seq.;  Stevens, 
Sources  of  the  Constitution  of  the  United  States,  41,  42,  47,  48,  49,  57, 
154.  I55>  177-  With  the  exception  of  Marr  v.  Enloe,  (1830)  I  Yerg. 
(Tenn.)  452,  where  that  was  one  of  the  grounds  of  the  decision,  there 
seems  to  have  been  no  case  before  1847  in  which  legislation  was  actu- 
ally declared  unconstitutional  upon  the  ground  that  legislative  power 
was  delegated.  And  since  then  the  courts  as  a  general  rule  certainly 
have  not  followed  any  theory  consistently  and  intelligently.  To  an 
amazing  extent  the  decisions  are  either  based  upon  fictions  or  based 
upon  cases  which  do  not  apply  or  the  opinions  do  not  notice  distinctions 
which  are  admitted  by  all  who  consider  such  distinctions.  In  spite  of 
frequent  declarations  by  the  courts  that  legislative  power  may  not 
be  delegated,  such  opinions  and  decisions  cast  some  doubt  upon  the 
propriety  of  their  ever  declaring  legislation  unconstitutional  upon  the 
ground  that  a  constitution  impliedly  forbids  a  delegation  of  legislative 
power:  see  21  Harv.  L.  Rev.  206;  Thayer,  Life  of  Marshall,  chap.  5. 
Yet  if  it  is  clear  that  the  legislature  may  not  delegate  a  power  which 
another  organ  attempts  to  exercise,  the  courts  have  a  stronger  reason 
for  declaring  that  exercise  unconstitutional  than  they  ordinarily  have 
for  declaring  the  action  of  another  department  of  government  in- 
valid, for  the  right  of  courts  to  decide  whether  legislation  has  been 
passed  by  the  body  prescribed  by  the  constitution  is  clearer  than  their 
right  to  decide  whether  legislation  passed  in  the  proper  manner  is 
constitutional:  see  language  of  Gibson,  J.,  dissenting,  in  Eakin  y. 
Raub,  (1825)  12  S.  &  R.  (Pa.)  330,  349,  354.— The  court  said  in 


Chicago  &  N.  W.  Ry.  Co.  v.  Dey,  (1888)  35  Fed.  866,  874,  i  L.  R.  A. 
744,  750,  "After  all,  the  question  is  one  more  of  form  than  of  sub- 
stance. The  vital  question  with  both  shipper  and  carrier  is  that  the 
rates  shall  be  just  and  reasonable,  and  not  by  what  body  they  shall  be 
put  in  force."  To  just  as  great  an  extent  the  question  whether  the 
President  may  order  the  punishment  of  a  counterfeiter  without  trial  is 
one  "more  of  form  than  of  substance."  And  so  is  the  question  whether 
in  a  common  law  suit  in  a  federal  court  where  the  value  in  controversy 
exceeds  twenty  dollars  the  defendant  may  be  denied  a  trial  by  jury. 
But  the  men  who  adopted  some  of  our  constitutions,  at  least,  con- 
sidered the  forms  of  government  important :  see  Pollock's  Maine's  An- 
cient Law,  175;  Thayer,  The  Origin  and  Scope  of  the  American  Doc- 
trine of  Constitutional  Law,  7  Harv.  L.  Rev.  137,  note. 

*  See  pp.  40,  42,  infra. 

"State  v.  Chicago,  M.  &  St.  P.  Ry.  Co.,  (1888)  38  Minn.  281,  37 
N.  W.  782;  Georgia  R.  6-  B.  Co.  v.  Smith,  (1883)  70  Ga.  694;  Tilley  v. 
Savannah,  F.  6-  W.  R.  Co.,  (1881)  5  Fed.  641;  McWhorter  v.  Pen- 
sacola  6-  A.  R.  Co.,  (1888)  24  Fla.  417,  5  So.  129,  2  L.  R.  A.  504; 
Storrs  v.  Pensacola  &  A.  R  Co.,  (1892)  29  Fla.  617,  n  So.  226;  and 
see  Trustees  v.  Saratoga  G.,  E.  L.  &  P.  Co.,  ( 1908)  191  N.  Y.  123,  83  N. 
E.  693;  Stone  v.  Yazoo  &  M.  V.  R.  Co.,  (1885)  62  Miss.  607,  645,  21  A. 
&  E.  R.  Cas.  6,  16;  Stone  v.  Natchez,  J.  &  C.  R.  Co.,  (1885)  62  Miss.  646, 
21  A.  &  E.  R.  Cas.  17;  People  v.  Harper,  (1878)  91  111.  357;  Southern 
Ry.  Co.  v.  Hunt,  (1908)  Ind.  App.,  83  N.  E.  721;  Chicago,  I  &  L.  Ry. 


14  RATE   REGULATION   AND  THE   DISTRIBUTION 

Calling  attention  to  these  two  lines  of  cases,  it  is  submit- 
ted that  the  legislature  is  the  only  governmental  body  which 
may  determine  the  principles  upon  which  rates  shall  be  reg- 
ulated, and  that  while  the  legislature,  when  it  names  specific 
rates,  need  not  disclose  the  principles  upon  which  it  acts  or 
even  consciously  adopt  any  principles,  that  body  may  not 
grant  to  any  other  organ  of  government  any  power  what- 
ever to  name  specific  rates  for  future  transportation  with- 
out first  laying  down  principles  sufficient  for  the  guidance 
of  that  organ,  although  after  the  legislature  has  determined 
the  principles  upon  which  rates  shall  be  regulated  it  may 
grant  to  an  administrative  organ  power  to  name  rates  in 
accordance  with  those  principles,  the  power  of  that  organ 
depending  upon  the  completeness  with  which  principles  have 
been  stated  for  its  guidance.30 


Co.  v.  Railroad  Comn.,  (1906)  38  Ind.  App.  439,  450,  451,  78  N.  E.  338, 
342,  79  N.  E.  520.  Compare  Central  of  Ga.  Ry.  Co.  v.  Railroad  Comn., 
(1908)  161  Fed.  925,  985.  We  must  distinguish  from  the  above  cases 
the  cases  in  which  other  courts  have  sustained  other  statutes  which 
declared  that  the  determinations  of  the  commissions  should  con- 
stitute prima  facie  evidence  of  what  were  the  lawful  rates :  Chicago,  B. 
6-  Q.  R.  Co.  v.  Jones,  (1894)  149  111.  361,  37  N.  E.  247,  24  L.  R.  A. 
141;  Chicago  &  N.  W.  Ry.  Co.  v.  Dey,  (1888)  35  Fed.  866,  i  L.  R.  A. 
744;  Tift  v.  Southern  Ry.  Co.,  (1905)  138  Fed.  753,  affirmed, 
Southern  Ry.  Co.  v.  Tift,  (1907)  206  U.  S.  428,  27  Sup.  Ct.  709;  State 
v.  Minneapolis  &  St.  L.  R.  Co.,  (1900)  80  Minn.  191,  83  N.  W.  60; 
Burlington,  C.  R.  &  N.  Ry.  Co.  v.  Dey,  (1891)  82  Iowa,  312,  48  N.  W. 
98,  12  L.  R.  A.  436;  State  v.  Freemont,  E.  6-  M.  V.  R.  Co.,  (1888)  23 
Neb.  117,  36  N.  W.  305,  (1887)  22  Neb.  313,  35  N.  W.  118.  The 
question  of  delegation  of  power  was  discussed  only  in  the  Illinois  case, 
the  case  in  35  Fed.,  and  in  State  v.  Missouri  P.  Ry.  Co.,  (1907)  Kan., 
92  Pac.  606;  Atlantic  E.  Co.  v.  Wilmington  &  W.  R.  Co.,  (1892)  in 
N.  C.  463,  16  S.  E.  393,  18  L.  R.  A.  393,  in  the  last  two  of  which  the 
remarks  were  dicta.  (See  also  Corporation  Comn.  v.  Seaboard  A.  L. 
System,  (1900)  127  N.  C.  283,  288,  37  S.  E.  266,  268.)  And  Portland  & 
6.  C.  R.  Co.  v.  Grand  T.  Ry.  Co.,  (1858)  46  Me.  69;  Vermont  6-  M. 
R.  Co.  v.  Fitchburg  R.  Co.,  (1852)  63  Mass.  (9  Cush.)  369,  were  far 
different  from  the  above:  in  each  case  the  court,  under  statutory  au- 
thority, appointed  commissioners  to  determine  the  rates  which  under 
existing  law  one  party  to  the  action  might  charge  the  other  party.  State 
statutes  upon  rate  regulation  by  commission  are  collected  in  Beale  & 
Wyman,  Railroad  Rate  Regulation,  p.  1081  et  seq. 

*°  So  also  it  seems  that  a  legislature  cannot  constitutionally  grant 
to  a  commission  power  to  permit  or  to  refuse  to  permit  combinations 
between  competing  carriers  without  first  laying  down  principles  for  the 
guidance  of  the  commission.  It  is  obvious  to  any  one  who  examines 
the  question  dispassionately  that  some  combinations  between  com- 


OF   POWERS  IN   THE   CONSTITUTIONS  15 

Some  of  the  courts  in  sustaining  laws  which  authorized 
commissions  to  name  rates  for  future  transportation  have 
said  that,  as  economic  conditions  change  from  time  to  time, 
rates  can  be  named  better  by  a  commission  than  by -the 
legislature,  which  is  not  constantly  in  session.31  This  argu- 
ment from  convenience  is  certainly  a  strong  one;  and  deci- 
sions that  railroad  commissions  may  name  specific  rates  do 
not  necessarily  conflict  with  the  decisions  that  the  legisla- 
ture alone  may  determine  the  principles  upon  which  the 
government  shall  be  conducted. 

In  declaring  that  a  state  might  empower  a  commission  to 
regulate  charges  for  gas  and  electric  service,  a  court  has 
said  that  conditions  in  the  several  localities  differed  so 
greatly  that  the  legislature  could  not  justly  establish  uni- 
form rates  for  the  entire  state  and  that  it  would  not  be 
practicable  for  the  legislature  itself  to  establish  rates  in 
each  of  the  communities.32  And  the  same  position  might 
properly  be  taken  with  regard  to  charges  for  transporta- 
tion. In  both  cases  it  is  true  that  the  legislature  cannot 
satisfactorily  do  more  than  declare  the  principles  which  the 
commission  shall  apply;  although  in  neither  case  does  it 


peting  carriers  are  decidedly  in  the  interest  of  the  public,  that  some 
are  not  injurious,  while  still  others  may  prove  to  be  against  the  public 
interest.  These  combinations  admit  of  classification,  and  it  is  the  duty 
of  the  legislature,  when  regulating  them  or  when  providing  for  their 
regulation,  to  declare  the  lines  of  division  or  the  principles  by  which 
those  lines  may  be  clearly  ascertained. — A  statute  of  Minnesota  which 
attempted  to  delegate  to  a  commission  an  unrestrained  veto  power  over 
proposed  increases  in  the  capitalization  of  railroads  incorporated  in  that 
state  was  declared  unconstitutional  in  State  v.  Great  N.  Ry.  Co.,  (1907) 
100  Minn.  445,  in  N.  W.  289,  10  L.  R.  A.  N.  S.  250. 

n  State  v.  Chicago,  M.  &  St.  P.  Ry.  Co.,  (1888)  38  Minn.  281,  37  N. 
W.  782;  Georgia,  R.  &  B.  Co.  v.  Smith,  (1883)  70  Ga.  694;  Tilley  v. 
Savannah,  F.  &  W.  R.  Co.,  (1881)  5  Fed.  641.  See  also  McWhorter  v. 
Pensacola  &  A.  R.  Co.,  (1888)  24  Fla.  417,  5  So.  129,  2  L.  R.  A.  504; 
Chicago  &  N.  W.  Ry.  Co.  v.  Dey,  (1888)  35  Fed.  866,  i  L.  R.  A.  744; 
Trustees  v.  Saratoga  G.,  E.  L.  &  P.  Co.,  (1908)  191  N.  Y.  123,  83  N.  E. 
693,  699- 

83  Trustees  v.  Saratoga  G.,  E.  L.  6-  P.  Co.,  (1908)  191  N.  Y.  123, 
83  N.  E.  693.  And  see  State  v.  Chicago,  M.  &  St.  P.  Ry.  Co.,  (1888) 
38  Minn.  281,  37  N.  W.  782;  Georgia  R.  &  B.  Co.  v.  Smith,  (1883)  70 
Ga.  694.  For  other  practical  arguments  in  support  of  the  delegation  of 
power  to  administrative  organs,  see  Young,  The  Relation  of  the  Ex- 
ecutive to  the  Legislative  Power,  Proc.  Am.  Pol.  Sci.  Assn.,  I,  47. 


1 6  RATE   REGULATION   AND   THE   DISTRIBUTION 

follow  that  the  commission  may  be  allowed  to  decide  what 
those  guiding  principles  shall  be. 

Some  of  the  courts  have  also  sustained  statutes  which 
authorized  commissions  to  name  rates  upon  the  ground  that 
in  those  statutes  the  legislatures  had  declared  what  the  law 
should  be  and  had  left  to  the  commissions  questions  of 
fact.33  Certainly  where  definite  standards  are  established 


33  See  Trustees  v.  Saratoga  G.,  E.  L.  &  P.  Co.,  ( 1908)  191  N.  Y.  123, 
83  N.  E.  693,  700,  where  the  commission  was  empowered  to  determine 
what  were  reasonable  maximum  rates ;  and  State  v.  Chicago,  M.  &  St. 
P.  Ry.  Co.,  (1888)  38  Minn.  281,  300,  302,  37  N.  W.  782,  787,  788, 
where  the  statute  provided  that  the  charges  should  be  equal  and  rea- 
sonable. In  view  of  the  illustrations  used,  the  courts  apparently  had 
this  thought  in  mind  in  Tilley  v.  Savann-ah,  F.  &  W.  R.  Co.,  (1881)  5 
Fed.  641,  657,  where  the  statute  provided  that  if  a  railroad  should 
charge  more  than  a  fair  and  reasonable  rate  it  should  be  deemed  guilty 
of  extortion,  and  that  a  commission  should  name  reasonable  and  just 
rates;  and  in  Chicago  &  N.  W.  Ry.  Co.  v.  Dey,  (1888)  35  Fed.  866, 
874,  where  the  statute  provided  that  if  any  railroad  "shall  charge  .  . 
more  than  a  fair  and  reasonable  rate  ....  or  shall  make  any 
unjust  or  unreasonable  charge  .  .  .  the  same  shall  be  deemed 
guilty  of  extortion,"  and  required  a  commission  to  make  a  schedule  of 
reasonable  and  maximum  rates,  such  schedule  to  be  prima  facie  evi- 
dence that  the  rates  named  therein  were  reasonable  and  just  maximum 
rates.  In  reference  to  the  illustration  in  the  case  last  cited,  we  may 
remark  in  passing  that  in  declaring  that  a  carrier  should  be  allowed 
to  earn  three  per  cent,  for  every  act  of  transportation  the  legislature 
would  be  fixing  an  unpractical  standard;  and  we  may  question  whether 
in  declaring  that  the  company  should  earn  that  percentage  from  its 
business  as  a  whole  the  legislature  would  be  furnishing  adequate 
guidance  for  the  regulation  of  the  separate  rates.  In  Georgia  R.  &  B. 
Co.  v.  Smith,  (1883)  70  Ga.  694,  (1888)  128  U.  S.  174,  9  Sup.  Ct.  47, 
the  statute  provided  that  a  railroad  charging  more  than  a  fair  and 
reasonable  rate  should  be  deemed  guilty  of  extortion,  and  provided  for 
the  appointment  of  commissioners  who  should  make  schedules  of  just 
and  reasonable  rates.  The  state  court  decided,  to  use  the  language  of 
the  United  States  Supreme  Court,  "that  it  was  expected,  not  that  the 
legislature  would  itself  make  specific  regulations  as  to  what  should  in 
each  case  be  a  proper  charge,  but  that  it  would  simply  provide  the 
means  by  which  such  rates  should  be  ascertained  and  enforced."  In 
Chicago,  /.  &  L.  Ry.  Co.  v.  Railroad  Comn.,  (1906)  38  Ind.  App.  439, 
451,  78  N.  E.  338,  342,  79  N.  E.  520;  Southern  Ry.  Co.  v.  Hunt,  (1908) 
Ind.  App.,  83  N.  E.  721,  725,  where  the  commission  was  directed,  upon 
complaint,  to  determine  whether  the  rates  charged  were  just  and  rea- 
sonable, and,  if  not,  to  fix  just  and  reasonable  rates,  the  court  spoke 
of  the  decisions  of  the  commission  as  to  whether  a  railroad's  charges 
were  just  and  reasonable  as  determinations  of  questions  of  fact.  In  the 
Indiana  cases,  however,  the  court  was  not  discussing  the  question  of 
delegation  of  legislative  power.  See  also  cases  cited  in  note  29,  supra, 
concerning  statutes  by  which  the  rates  named  by  commissions  furnished 
prima  facie  evidence  as  to  what  were  the  lawful  rates. 


OF  POWERS  IN  THE  CONSTITUTIONS  17 

by  statute  a  grant  of  power  to  ascertain  and  state  what 
rates  will  conform  to  those  standards  does  not  violate  the 
rule  that  legislative  power  may  not  be  delegated.  This  prin- 
ciple cannot  be  disputed.  The  only  question  is  whether  the 
statutes  have  in  reality  left  to  the  commissions  merely  the 
determination  of  matters  of  fact.  To  this  question,  how- 
ever, the  courts  have  given  but  very  little  consideration. 

On  the  other  hand,  the  suggestion  which  has  been  made 
in  support  of  commission-made  rates34  that  because  the  leg- 
islature may  for  historical  reasons  grant  some  self-govern- 
ment to  localities35  it  may  delegate  legislative  power  to 
other  governmental  organs  is  entirely  unconvincing.  The 
fact  that  there  is  one  exception  to  the  rule  does  not  justify 
the  creation  of  new  exceptions.  And  since  the  distributive 
clauses  of  the  state  constitutions  do  not  apply  to  local  gov- 
ernments36 but  do  apply  to  the  central  governments  of 
those  states,  there  is  obviously  nothing  in  the  argument, 
which  was  made  in  support  of  rate  regulation  by  a  gas  and 
electricity  commission,37  that  because  a  power  may  be 
granted  to  administrative  officers  of  a  locality  similar  power 
may  be  granted  to  administrative  officers  of  the  state. 

Two  opinions  also  refer  to  laws  declaring  that  the  judici- 
ary may  make  rules  of  court.38  But  allowing  an  organ  to 
regulate  procedure  before  itself  is  far  different  from  allow- 
ing an  organ  to  make  rules  of  substantive  law.  And  the 
contention  that  authorizing  a  commission  to  name  rates  is 
similar  to  allowing  the  companies  concerned  to  name  their 
own  rates39  is  likewise  unsound.  A  commission  acts  as  an 


"See  Tilley  v.  Savannah,  F.  &  W.  R.  Co.,  (1881)  5  Fed.  641;  and 
also  People  y.  Harper,  (1878)  91  111.  357.  The  opinion  in  the  latter 
case  is  criticised  in  note  73,  infra. 

K  See  page  4,  supra. 

88  See  page  5,  supra. 

31  Trustees  v.  Saratoga  G.,  E.  L.  &  P.  Co.,  (1908)  191  N.  Y.  123,  83 
N.  E.  693- 

38  State  v.  Chicago,  M.  &  St.  P.  Ry.  Co.,  (1888)  38  Minn.  281,  37 
N.  W.  782;  Georgia  R.  &  B.  Co.  v.  Smith,  (1883)  70  Ga.  694. 

"  Tilley  v.  Savannah,  F.  &  W.  R.  Co.,  (1881)  5  Fed.  641,  656;  Mc- 
Whorter  v.  Pensacola  &  A.  R.  Co.,  (1888)  24  Fla.  417,  5  So.  129,  2  L.  R. 


l8  RATE  REGULATION  AND  THE  DISTRIBUTION 

organ  of  government — it  interferes  with  the  conduct  of 
third  parties  in  matters  in  which  the  commission  is  not 
itself  interested;  while  the  officers  of  a  railroad,  although 
doing  what  some  governmental  organ  might  do,  do  not 
act  as  agents  of  the  government  but  interfere  with  the  con- 
duct of  others  only  in  matters  affecting  the  company 
itself. 

We  shall  examine  later  the  position  that  an  administra- 
tive body  may  be  granted  discretion  in  the  establishment  of 
rates.40 

The  United  States  Supreme  Court  has  never  decided  how 
much  power  may  be  granted  by  Congress  to  the  Interstate 
Commerce  Commission,41  and  the  question  whether  the  dis- 


A.  504. — On  the  converse  of  this  proposition  see  Morrow  v.  Wipf, 
(1908)  S.  D.,  115  N.  W.  1 121,  1127;  People  v.  Board  of  Election 
Comrs.,  (1906)  221  111.  9,  19,  77  N.  E.  321,  323,  where  the  courts  also 
failed  to  notice  the  distinction,  which  is  pointed  out  in  the  text,  and 
declared  that  a  legislature  may  not  allow  the  officials  of  a  political  party 
to  determine  the  method  by  which  that  party  shall  nominate  its  candi- 
dates. The  opinions  are  unconvincing.  A  legislature  certainly  does 
not  delegate  legislative  power  when  it  allows  an  organization  to  decide 
such  questions  for  itself.  If  those  decisions  were  sound  a  law  which 
provided  that  a  railroad  should  charge  two  cents  a  mile  for  passenger 
transportation  unless  its  appropriate  officers  should  fix  different  rates, 
but  that  such  officers  might  fix  different  rates,  would  have  to  be  held 
unconstitutional  as  delegating  legislative  power  to  the  railroad  officials. 
The  cases  are  parallel. — On  the  other  hand,  in  State  v.  Felton,  (1908) 
77  Ohio  St.  554,  577,  84  N.  E.  85,  89,  the  court  by  a  large  majority 
decided  that  a  law  which  authorized  party  officials  to  prescribe  the 
purpose,  time,  manner  and  conditions  of  holding  a  primary  election  and 
the  qualifications  of  electors  did  not  delegate  legislative  power.  See 
also  note  79,  infra. 

40  See  pages  36-38,  infra. 

41  There  is  a  dictum  that  "Congress  might  itself  prescribe  the  rates, 
or  it  might  commit  to  some  subordinate  tribunal  this  duty:"  Interstate 
Com.  Comn.  v.  Cincinnati,  N.  O.  &  T.  P.  Ry.  Co.,  (1897)   167  U.  S. 
479,  494,  17  Sup.  Ct.  896,  898.  See  also  Texas  &  P.  Ry.  Co.  v.  Inter- 
state Com.  Comn.,  (1896)  162  U.  S.  197,  216,  16  Sup.  Ct.  666,  674;  dis- 
senting opinion  in  Chicago,  M.  &  St.  P.  Ry.  Co.  v.  Minnesota,  (1890) 
134  U.  S.  418,  464,  10  Sup.  Ct.  462,  702,  704;  and  notes  55,  56,  infra. 
But  this  dictum  does  little,  if  anything,  towards  settling  the  point  now 
under  discussion.     And  the  same  comment  must  be  made  upon  the 
following   sentence    from   the    opinion    in    Interstate    Com.    Comn.    v. 
Chicago  G.  W.  Ry.  Co.,  (1908)  209  U.  S.  108,  117,  28  Sup.  Ct.  493,  496, 
"It  is  unnecessary  to  define  the  full  scope  and  meaning  of  the  pro- 
hibition found  in  sec.  3  of  the  Interstate  Commerce  Act  [relating  to 


OF   POWERS  IN   THE   CONSTITUTIONS  19 

tribution  of  powers  by  the  state  constitutions  has  been  vio- 
lated by  any  administrative  order  concerning  rates  has  been 
before  that  court  only  in  the  Railroad  Commission  Cases,42 
where  the  state  court  had  already  declared  that  the  law 
there  considered  did  not  violate  the  state  constitution43 — 
a  decision  which  was  binding  upon  all  other  courts.44  The 
United  States  Supreme  Court  did  briefly  announce  its  con- 
currence with  the  interpretation  which  the  state  court  had 
placed  upon  the  state  constitution.45  But  the  attention  of 


discriminations],  or  even  to  determine  whether  the  language  is  suffi- 
ciently definite  to  make  the  duties  cast  on  the  Interstate  Commerce  Com- 
mission ministerial,  and  therefore  such  as  may  legally  be  imposed  upon 
a  ministerial  body,  or  legislative,  and  therefore,  under  the  federal 
Constitution,  a  matter  for  congressional  action,  for,  within  any  fair 
construction  of  the  terms  'undue  or  unreasonable,'  the  findings  of  the 
circuit  court  place  the  action  of  the  railroads  outside  the  reach  of  con- 
demnation." 

48  (1886)  116  U.  S.  307,  347,  352,  6  Sup.  Ct.  334,  348,  349,  388,  391, 
1191;  reversing  Farmers'  L.  &  T.  Co.  v.  Stone,  (1884)  20  Fed.  270; 
Illinois  C.  R.  Co.  v.  Stone,  (1884)  20  Fed.  468. 

"Stone  v.  Yazoo  &  M.  V.  R.  Co.,  (1885)  62  Miss.  607,  645,  21  A. 
&  E.  R.  Cas.  6,  16,  where  the  only  reference  to  the  subject  is  as  fol- 
lows: "The  act  creating  the  railroad  commission  is  not  violative  of 
the  I4th  Amendment  of  the  Constitution  of  the  United  States,  or  of  any 
provision  of  the  constitution  of  the  state,  in  that  it  creates  a  commis- 
sion and  charges  it  with  the  duty  of  supervising  railroads ;"  unless  there 
is  some  reference  to  the  subject  in  the  declaration,  "We  hold  that  the 
state  had  the  right  to  create  an  agency  of  the  state  to  exercise  such 
supervision  as  it  may  lawfully  employ  over  railroads  within  its 
limits."  See  comment  on  Stone  v.  Natchez,  J.  &  C.  R.  Co.  in  note  46, 
infra. 

44  "If  a  state  court  has  decided  that  a  law  is  in  harmony  with  the 
state  constitution  its  validity,  so  far  as  the  state  constitution  is  con- 
cerned, cannot  be  questioned  elsewhere :"  Patterson,  The  United  States 
and  the  States  Under  the  Constitution,  2d  ed.,  p.  282;  and  see  Smith  v. 
Jennings,  (1907)  206  U.  S.  276,  278,  27  Sup.  Ct.  610,  611;  West  v.  Louis- 
iana, (1904)  194  U.  S.  258,  24  Sup.  Ct.  650. 

45  The  court  stated  the  contention  that  the  act  conferred  both  legisla- 
tive and  judicial  powers  on  the  commission  and  was  therefore  repugnant 
to  the  constitution  of  Mississippi,  and  made  simply  this  reply,  "The 
Supreme  Court  of  Mississippi  has  decided    .     .     .     that  the  statute  is 
not  repugnant  to  the  constitution  of  the  state  'in  that  it  creates  a  com- 
mission and  charges  it  with  the  duty  of  supervising  railroads.'     To 
this  we  agree,  and  this  is  all  that  need  be  decided  in  this  case:"  116 
U.  S.  336, 6  Sup.  Ct.  347.— In  Chicago  &  N.  W.  Ry.  Co.  v.  Dey,  (1888)  35 
Fed.  866,  875,  in  answer  to  the  contention  that  legislative  power  was 
delegated  to  commissioners  in  the  statute  there  considered,  the  court 
said  that  "the  validity  of  the  act  of  the  state  of  Mississippi,  delegating 
like  power  to  a  board  of  railroad  commissioners,  was  before  the  Su- 


2O  RATE  REGULATION  AND  THE   DISTRIBUTION 

all  the  courts  which  considered  that  law  was  devoted  almost 
exclusively  to  other  constitutional  questions,46  so  that  it 
seems  that  even  if  the  Supreme  Court  had  had  the  right  to 
pass  upon  the  validity  of  the  delegation  of  power,  its  deci- 
sion upon  that  point  would  be  of  no  greater  value  as  a 
precedent  than  was  that  casual  decision  upon  the  commerce 
clause  in  the  Granger  Cases*1  which  was  overruled  in 
W abash,  St.  L.  &  P.  Ry.  Co.  v.  Illinois** 
In  Chicago,  M.  &  St.  P.  Ry.  Co.  v.  Tompkins49  and  Min- 


preme  Court  of  the  United  States,  and  though  this  specific  objection 
was  made  by  counsel  to  its  validity,  the  act  was  sustained,"  without, 
however,  any  special  reference  being  made  to  this  question  in  the  opin- 
ion.— An  examination  of  unreported  portions  of  the  briefs  filed  in  the 
Supreme  Court  shows  that  counsel  did  there  discuss,  with  ordinary 
ability,  the  question  of  delegation  of  legislative  power  to  an  administra- 
tive body.  And  in  62  Miss,  at  626  there  are  references  to  the  ques- 
tion of  delegation  of  power  in  a  few  authorities  cited  in  a  brief  against 
the  law.  Were  it  not  for  the  latter,  we  might  say  that,  so  far  as  shown 
by  the  reports  of  any  of  the  cases,  the  contention  that  the  statute  was 
not  in  accordance  with  the  distribution  of  powers  by  the  state  constitu- 
tion might  have  meant  merely  that  if  the  state  had  any  control  what- 
ever over  the  rates  of  a  railroad  the  charter  of  which  had  granted  to 
it  in  general  terms  the  right  to  regulate  its  own  rates,  that  control 
could  be  exercised  only  through  a  strictly  judicial  body.  In  Illinois  C. 
R.  Co.  v.  Stone,  (1884)  20  Fed.  468,  471,  the  court  said,  "The  question 
of  what  is  reasonable  compensation  in  such  cases  is  one  alone  for 
judicial  ascertainment,  when  not  fixed  by  the  charter,  and  no  power 
is  reserved  therein,  thereafter  to  fix  it." 

48  In  addition  to  the  cases  cited  above,  see  Stone  v.  Natchez,  J.  & 
C.  R.  Co.,  (1885)  62  Miss.  646,  21  A.  &  E.  R.  Cas.  17,  which  involves 
simply  the  impairment  of  contract  clause.    The  court  there  says  that  the 
commission  merely  secured  conformity  by  the  road  with  the  implied 
condition  in  its  charter  to  carry  for  reasonable  rates.  "The  final  test 
of  reasonablness  of  rates  is  not  with  the  railroad  commission,  but,  as 
before,  with  the  government,  through  its  judiciary.  Fixing  rates  by  the 
commission  is  not  final  and  conclusive  against  a  railroad  company.  It  is 
only  prima  facie  correct,  and  may  be  tested  by  the  courts.    If  the  action 
of  the  commission  is  just,  it  should  prevail.    If  it  is  not,  it  may  be  as- 
sumed that  it  will  not.  Of  that  none  should  complain.  The  concession 
made  in  the  bill  of  the  appellee  of  the  right  of  judicial  control  to  pre- 
vent extortion  and  unjust  discrimination  is  an  admission  of  the  right  of 
government  control;  and  if  the  state  can  control  or  supervise  at  all  it 
may  select  the  agency  through  which  to  exert  its  right."     But  it  does 
not  follow  that  the  legislature  may  select  an  agency  as  freely  as  the 
state  itself  might  do  it,  and  that  point  is  not  discussed. 

"Chicago,  B.  &  Q.  R.  Co.  v.  Iowa,  (1876)  94  U.  S.  155,  163;  Peik  v. 
Chicago  &  N.  W.  Ry.  Co.,  (1876)  94  U.  S.  164,  177,  178. 
*  (1886)  118  U.  S.  557,  566-569,  7  Sup.  Ct.  4,  7-9. 

49  (1900)  176  U.  S.  173,  20  Sup.  Ct.  336;  (1898)  90  Fed.  363. 


OF   POWERS   IN   THE  CONSTITUTIONS  21 

neap  oils  &  St.  L.  R.  Co.  v.  Minnesota50  the  question  of 
the  delegation  of  legislative  power  was  not  discussed  either 
by  the  court  of  last  resort  or  by  the  lower  courts.  In 
Georgia  R.  &  B.  Co.  v.  Smith51  while  the  court  referred  to 
the  decision  of  the  state  court  upon  the  constitutionality  of 
the~  delegation  of  power,  it  properly  refrained  from  com- 
ment thereon: — And  in  Reagan  v.  Farmers'  L.  &  T.  Co.52 
iTTiacTtieen  shown  in  the  lower  court53  that  the  state  of 
Texas  had  considered  it  advisable  to  amend  its  constitution  , 
in  order  to  authorize  the  regulation  of  rates  by  commission; 
therefore,  while  the  Supreme  Court  did  say54  that  a  state 
may  regulate  by  means  of  a  commission,  that  case  certainly 
does  not  show  that  in  the  absence  of  an  express  provision 
in  the  state  constitution  a  legislature  may  bestow  upon  a 
commission  as  much  power  over  rates  as  the  legislature 
itself  might  exercise. 

The  court  of  last  resort  has  said  at  times  that  the  naming 
of  specific  rates  for  future  transportation  is  a  legislative 
power,55  and  at  times  that  it  is  an  administrative 
power,56  and  the  court  has  also  appeared  undecided  upon 
this  point.57  Yet,  as  we  have  already  observed58  that  there 
are  some  powers  which  may  be  exercised  by  the  legislature 
itself,  but  the  exercise  of  which  is  not  confined  strictly  to 
the  legislature  and  may,  therefore,  be  assigned  by  it  to  an 


60  (1902)  186  U.  S.  257,  22  Sup.  Ct.  900;  State  v.  Minneapolis  6-  St. 
L.  R.  Co.,  (1900)  80  Minn.  191,  83  N.  W.  60. 

51  (1888)  128  U.  S.  174,  178,  9  Sup.  Ct.  47,  48. 

52  (1894)  154  U.  S.  362,  14  Sup.  Ct.  1047- 

68  Mercantile  T.  Co.  v.  Texas  6-  P.  Ry.  Co.,  (1892)  51  Fed.  529,  532. 
^"_J54  IT  c;  at  flp^t  ^p^.  i A  Suj>.  Ct.  at  1053. 

™McChord  v.  Louisville  &  N.  R.  Co.,  (1902)  183  U.  S.  483,  495, 
22  Sup.  Ct.  165,  169;  Interstate  Com.  Comn.  v.  Alabama  M.  Ry.  Co., 
(1897)  168  U.  S.  144,  162,  18  Sup.  Ct.  45,  47;  Interstate  Com.  Comn.  v. 
Cincinnati,  N.  O.  &  T.  P.  Ry.  Co.,  (1897)  167  U.  S.  479,  499,  500,  501, 
505,  506,  511,  17  Sup.  Ct.  896,  900,  901,  902,  903,  90S- 

"St.  Louis  &  S.  F.  Ry.  Co.  v.  Gill,  (1895)  156  U.  S.  649,  663,  15  Sup. 
Ct.  484,  490;  Reagan  v.  Farmers'  L.  &  T.  Co.,  (1894)  154  U.  S.  362, 
394,  14  Sup.  Ct.  1047,  1053.  See  also  note  46,  supra. 

"  Reagan  v.  Farmers'  L.  &  T.  Co.,  (1894)  154  U.  S.  362,  397,  14 
Sup.  Ct.  1047,  1054. 

08  p.  4,  supra. 


22  RATE   REGULATION   AND   THE   DISTRIBUTION 

administrative  organ,  these  cases  need  not  confuse  us. 
Taken  together  they  indicate  no  more  than  that  a  commis- 
sion may  not  name  specific  rates  without  legislative  authori- 
zation, but  that  a  commission  may  be  authorized  to  ascer- 
tain facts  as  to  rates  and  to  state  in  specific  form  princi- 
ples established  by  the  legislature. 

The  court  has  sustained  several  federal  statutes  which 
delegated  power  to  administrative  or  executive  officers  and 
which  were  attacked  upon  the  ground  that  the  power  dele- 
gated was  legislative,59  the  court  saying  that  the  officers 
were  merely  authorized  to  ascertain  facts  and  to  apply  the 
law  in  accordance  with  those  facts.  In  some  of  the  cases 
this  explanation  of  the  statute  is  a  rather  strained  one;60 
but  the  actual  decisions  in  those  cases  are  more  than  off-set 
by  the  reason  which  the  court  gave  in  support  of  the  deci- 
sions.61 And  while  the  court  has  sustained  legislation 
which  delegated  to  executive  officers  distinctively  congres- 
sional power  concerning  the  Philippine  Islands,62  those  de- 
cisions cannot  justify  similar  legislation  for  territory  which 
is  under  the  Constitution  of  the  United  States. 

The  court  has  also  sustained  a  federal  law  which  allowed 
local  authorities  to  make  certain  "supplementary  regula- 
tions" concerning  the  acquisition  of  title  to  public  lands.03 


69  Union  B.  Co.  v.  United  States,  (1907)  204  U.  S.  364,  27  Sup.  Ct. 
367;  and  cases  there  cited.  And  see  St.  Louis,  I.  M.  &  S.  Ry.  Co.  v. 
Taylor,  (1908)  210  U.  S.  281,  287,  26  Sup.  Ct.  616,  617. 

80  Consider  criticisms  in  dissenting  opinion  in  Field  v  Clark,  (1892) 
143  U.  S.  649,  697,  12  Sup.  Ct.  495,  506;  Gilhooly  v.  City  of  Elizabeth, 
(1901)  66  N.  J.  L.  484,  486,  49  Atl.  1106,  1107;  and  criticism  of  similar 
legislation  in  Prentice  and  Egan,  The  Commerce  Clause  of  the  Federal 
Constitution,  313. 

61  On  the  bearing  of  Field  v.  Clark,  (1892)    143  U.  S.  649,  12  Sup. 
Ct.  495,  on  railroad  rate  regulation,  see  also  Olney,  Railroad  Rate  Mak- 
ing by  Congress,  181  N.  A.  Rev.  490;  Peck,  Governmental  Regulation 
of  Railroad  Rates,  13  Am.  Lawyer,  485,  486;  Whitney,  The  Reciprocity 
Acts  of  1890,  31  Am.  L.  Reg.  186,  187. 

62  United  States  v.  Heinszen,  (1907)  206  U.  S.  370,  27  Sup.  Ct.  742; 
Dorr  v.  United  States,  (1904)  195  U.  S.  138,  24  Sup.  Ct.  808.  See  also 
The  Louisa  Simpson,   (1871)   2  Sawyer,  57,  61,  71,  15  Fed.  Cas.  953, 
955,  958. 

"Butte  C.  W.  Co.  v.  Baker,  (1905)  196  U.  S.  119,  25  Sup.  Ct.  211. 
See  also  United  States  v.  Ormsbee,  (1896)  74  Fed.  207. 


OF   POWERS   IN   THE   CONSTITUTIONS  23 

The  opinion  does  not  contain  a  thoroughly  satisfactory  dis- 
cussion of  the  question  involved,64  yet  the  reason  for  the 
decision  may  be  said  to  be  that  the  court  thought  that  the 
purpose  for  which  the  power  had  been  given  to  Congress 
had  been  sufficiently  observed  by  the  regulations  which  Con- 
gress had  itself  prescribed,  and  as  vast  interests  would 
suffer  from  a  decision  that  the  federal  statute  was  uncon- 
stitutional the  court  would  not  so  decide  where  the  invalid- 
ity was  not  clear.65  As  the  court  did  not  notice  it,  we  need 
not  lay  much  stress  upon  the  fact  that  the  local  authorities 
were  not  merely  administrative,  and  that  apparently  the 
"supplementary  regulations"  were  legitimate  exercises  of 
local  self-government.66  The  decision  that  the  power  to 


64  See  196  U.  S.  125,  126,  25  Sup.  Ct.  213.  The  question  is  how  far 
the  power  of  Congress  is  exclusive.  The  court  does  not  show  whether 
the  owner  of  the  land  had  actually  granted  to  its  agent,  Congress,  per- 
mission to  delegate  a  portion  of  the  power  committed  to  it. — Grant- 
ing that  Congress  thought  that  it  was  acting  for  the  best,  that  fact  does 
not  answer  the  constitutional  question. — The  question  is  not  whether  the 
power  is  legislative  in  its  nature,  but  whether  it  is  entrusted  to  the  ex- 
clusive control  of  Congress,  so  that  even  if  the  court  could  say  boldly 
that  neither  the  statute  nor  the  "supplementary  regulations"  were  in 
any  aspect  legislative  in  character  the  problem  would  not  be  entirely 
solved. 

"A  statute  must  always  be  upheld  unless  its  invalidity  is  clear,  re- 
gardless of  the  amount  involved. 

*"  In  this  case  the  regulations  were  made  by  a  state ;  but  a  state  could 
not  exercise  such  power  over  interstate  rates :  see  Stoutenburgh  v.  Hen- 
nick,  (1889)  129  U.  S.  141,  9  Sup.  Ct.  256;  and  also  McCornick  v. 
Western  U.  T.  Co.,  (1897)  79  Fed.  449,  451;  compare  In  re  Rahrer, 
(1891)  140  U.  S.  545,  ii  Sup.  Ct.  865. — Perhaps  the  statute  was 
analogous  to  that  considered  in  In  re  Rahrer,  and  merely  withdrew  a 
withdrawable  federal  restraint  upon  a  state's  power  over  property 
within  its  borders.  Between  the  exclusive  power  of  the  federal 
government  and  the  exclusive  power  of  the  states  there  are  fields  of 
jurisdiction  which  Congress  may  place  under  state  control,  which  are  of 
such  a  nature  that  we  might  say  that  the  state  and  federal  govern- 
ments held  them  in  common  because  of  vicinage  to  the  exclusive 
domains  of  each,  were  it  not  for  the  rule  of  the  supremacy  of  federal 
law,  a  rule  found  in  the  Constitution  but  sometimes  misapplied;  in  ad- 
dition to  In  re  Rahrer  see  Patterson,  The  United  States  and  the  States 
Under  the  Constitution,  2d  ed.,  p.  269,  note;  and,  by  way  of  analogy, 
p.  4,  supra.  Thus,  while  Congress  may  not  authorize  the  states  to  coin 
money  it  may  authorize  them  to  tax  federal  agencies  which  are  within 
their  borders :  see  Patterson,  op.  cit.,  p.  48 ;  and  also  U.  S.  Constitution, 
Art.  I,  sec.  10. — In  connection  with  this  note  in  general  consider  also 
Kansas  v.  Colorado,  (1907)  206  U.  S.  46,  92,  27  Sup  Ct.  655,  665;  Allen 


24  RATE  REGULATION  AND  THE  DISTRIBUTION 

make  those  "supplementary  regulations"  had  not  been 
clearly  shown  to  belong  exclusively  to  Congress,  while  it 
may  have  some  bearing  upon  the  question  how  far  the 
power  of  Congress  under  the  commerce  clause  is  exclusive, 
does  not  constitute  a  decision  upon  the  extent  to  which  the 
power  of  Congress  is  exclusive  under  any  clause  of  the 
Constitution  other  than  the  one  considered  in  that  case.67 

The  Supreme  Court  of  the  United  States  has  also  refer- 
red to  the  distribution  of  governmental  powers  in  several 
cases  involving  state  legislation,  but  its  remarks  upon  the 
subject  in  those  cases  were  of  comparatively  little  value.68 

Turning  again  to  the  decisions  of  state  courts,  we  must 
note  that  they  have  frequently  sustained  legislation  by 
which  administrative  officers  were  empowered  to  apply  the 
law  in  accordance  with  facts  to  be  ascertained  by  those  offi- 
cers. Thus  they  have  sustained  legislation  by  which  a  com- 
mission was  authorized  to  mark  boundary  lines  between 


v.  Riley,  (1906)  203  U.  S.  347,  27  Sup.  Ct.  95;  Woods  6-  Sons  v  Carl, 
(1906)  203  U.  S.  358,  27  Sup.  Ct.  99;  2  Am.  Pol.  Sci.  Rev.  347. 

r"The  line  has  not  been  exactly  drawn  which  separates  those  im- 
portant subjects,  which  must  be  entirely  regulated  by  the  legislature 
itself,  from  those  of  less  interest,  in  which  a  general  provision  may  be 
made,  and  power  given  to  those  who  are  to  act  under  such  general  pro- 
visions to  fill  up  the  details:"  Wayman  v.  Southard,  (1825)  10  Wheat, 
i,  43- 

"Michigan  C.  R.  Co.  v.  Powers,  (1906)  201  U.  S.  245,  26  Sup.  Ct. 
459,  where  the  distribution  was  clearly  directed  by  the  state  constitution ; 
Dreyer  v.  Illinois,  (1902)  187  U.  S.  71,  23  Supt.  Ct.  28;  St.  Louis  C.  C. 
Co.  v.  Illinois,  (1902)  185  U.  S.  203,  22  Sup.  Ct.  616.  The  two  latter 
cases  had  been  taken  up  from  the  state  court  of  last  resort.  The  rule 
as  to  the  distribution  of  governmental  powers  is  distinctly  separate 
from  other  rules  of  the  constitutions,  however  much  laws  which  violate 
that  rule  may  also  violate  other  rules.  The  court  said  in  Atlantic  C.  L. 
R.  Co.  v.  North  C.  Corp.  Comn.,  (1907)  206  U.  S.  i,  19,  27  Sup.  Ct.  585, 
591,  that  state  regulation  of  railroads  "may  be  exerted  either  directly  by 
the  legislative  authority  or  by  administrative  bodies  endowed  with 
power  to  that  end."  The  case  came  up  from  the  supreme  court  of  the 
state,  and  the  question  of  delegation  of  power  was  not  considered. 
Every  one  must  admit  that  a  legislature  may  confer  some  power  upon 
commissions.  But  the  case  does  nothing  whatever  toward  clearing  up 
the  question  of  how  much  power  a  legislature  may  bestow  upon  a  com- 
mission without  violating  that  distribution  of  powers  which  is  usually 
made  by  the  constitutions. 


OF  POWERS  IN   THE  CONSTITUTIONS  2$ 

counties,69  a  commission  was  authorized  to  determine  the 
efficiency  of  a  voting-machine  the  use  of  which,  if  efficient, 
was  directed  by  law,70  examining  boards  were  authorized 
to  inquire  into  the  qualifications  of  persons  seeking  fo  ex- 
ercise designated  public  occupations  and  to  license  those 
who  were  properly  qualified,71  state  boards  were  authorized 


"Innity  County  v.  Mendocino  County,  (1007)  isi  Cal  270.  oo  Pac. 
685-  "Although  the  line  was  marked  incorrectly  it  constituted  "tlfe 
legal  boundary.  In  Kennedy  v.  Mayor,  (1902)  24  R.  I.  461,  53  Atl.  317, 
the  court  sustained  a  law  which  directed  the  appointment  of  a  commis- 
sion to  divide  a  city  into  wards  and  voting-districts.  The  correctness 
of  the  decision  is  not  quite  so  clear  as  the  correctness  of  the  decision 
in  Trinity  County  v.  Mendocino  County,  but  it  seems  to  be  sound.  See 
also  In  re  Hunter,  (1908)  Minn.,  116  N.  W.  922,  924.  Rouse  v.  Thomp- 
son, (1907)  228  111.  522,  81  N.  E.  1109,  was  different  from  the  above 
cases.  In  it  the  court  declared  unconstitutional  an  act  authorizing 
political  committees  to  establish  delegate  districts  in  their  respective 
counties.  The  decision  can  be  supported,  if  at  all,  only  upon  the  ground 
that  so  much  discretion  was  allowed  to  the  committees  that  their  de- 
cisions would  be  of  a  legislative  nature,  and  that  the  committees  were 
of  such  a  character  that  legislation  by  them  could  not  be  justified  as 
exercises  of  local  self-government.  But  while  the  court  uses  language 
which  taken  alone  would  indicate  that  it  considered  the  work  strictly 
legislative  in  character,  it  deprives  that  language  of  any  importance  by 
apparently  admitting  that  the  work  could  be  entrusted  to  an  administra- 
tive organ  and  insisting  that  the  committees  could  not  constitutionally 
be  made  governmental  organs.  In  taking  the  latter  ground  the  court 
seems  to  be  in  error:  see  8  Cyc.  831;  Scholle  v.  State,  (1900)  90  Md. 
729,  46  Atl.  326,  50  L.  R.  A.  411;  St.  Louis,  I.  M.  &  S.  Ry.  Co.  v. 
Taylor,  (1908)  210  U.  S.  281,  287,  28  Sup.  Ct.  616,  617;  dissenting  opin- 
ion in  Rouse  v.  Thompson;  discussion  of  this  case  in  21  Harv.  L.  Rev. 
215,  216. 

T0  Elwell  v.  Comstock,  (1906)  99  Minn.  261,  109  N.  W.  113,  698,  7 
L.  R.  A.  N.  S.  621. 

n  Ex  part e  McManus,  (1907)  i.y  Olr  331,  on  Par  702,  stafaj^gg* 
of  architecture — see  concurring  opinion;  In  re  Thompson,  (1904)  36 
WashT~377,  78~PacT~899,  state  board  of  dental  examiners;  State  v. 
Briggs,  (1904)  45  Ore.  366,  77  Pac.  750,  78  Pac.  361,  state  board  of 
barber  examiners;  Ex  parte  Whitley,  (1904)  144  Cal.  167,  77  Pac.  879, 
state  board  of  dental  examiners;  Ex  parte  Gerino,  (1904)  143  Cal.  412, 
77  Pac.  166,  state  board  of  medical  examiners;  State  v.  Thompson, 
(1901)  160  Mo.  333,  60  S.  W.  1077,  54  L.  R.  A.  950,  state  auditor  au- 
thorized to  license  persons  of  good  character  to  make  books  on  horse 
races  at  race  courses  of  good  repute;  State  v.  Heinemann,  (1891)  80 
Wis.  253,  49  N.  W.  818,  state  board  of  pharmacy.  See  also  State  v. 
Chittenden,  (1906)  127  Wis.  468,  107  N.  W.  500;  Hildreth  v.  Craw- 
ford, (1884)  65  Iowa,  339,  21  N.  W.  667;  U.  S.  Rev.  Stats.,  sees.  4439- 
4442,  5  Fed.  Stats.  An.  398-400.  And  there  have  been  a  number  of 
cases  in  which  similar  statutes  were  sustained  without  any  consideratf 
of  the  question  of  delegation  of  legislative  power.  Contra,  Harmon  v. 
State,  (1902)  66  Ohio  St.  249,  64  N.  E.  117,  58  L.  R.  A.  618,  where  a 


26  RATE   REGULATION   AND   THE   DISTRIBUTION 

to  issue  quarantine  and  other  regulations  for  the  protec- 
tion of  the  health  of  the  community,72  and  other  similar 
or  supposedly  similar  delegations  of  power  were  made.73 


statute  which  authorized  examiners  to  license  steam  engineers  who 
should  be  found  "trustworthy  and  competent"  was  declared  invalid  on 
the  ground  that  it  delegated  legislative  power.  The  only  case  cited 
by  the  court  was  Mathews  v.  Murphy,  referred  to  in  note  73,  infra,  and 
it  is  not  clear  that  that  case  turned  upon  the  question  of  delegation  of 
legislative  power.  Compare  State  v.  Gardner,  (1898)  58  Ohio  St.  599,  51 
N.  E.  136,  41  L.  R.  A.  689.  In  connection  with  Harmon  v.  State  con- 
sider also  cases  cited  in  note  73,  infra. 

n  Pierce  v.  Doolittle,  (1906)  130  Iowa,  333,  106  N.  W.  751,  6  L.  R. 
A.  N.  S.  143;  Blue  v.  Beach,  (1900)  155  Ind.  121,  56  N.  E.  89,  50  L.  R. 
A.  64.  See  also  Isenhour  v.  State,  (1901)  157  Ind.  517,  60  N.  E.  40; 
Hurst  v.  Warner,  (1894)  102  Mich  238,  60  N.  W.  440,  26  L.  R.  A. 
484;  Koppala  v.  State,  (1907)  Wyo.,  89  Pac.  576,  579;  Cooper  v.  Schultz, 
(1866)  32  How.  Pr.  (N.  Y.)  107  (in  the  last  of  which  the  courts  sus- 
tained a  broad  grant  of  power  to  commissioners  appointed  by  the 
governor  and  senate:  see  pp.  112,  124);  Walker  v.  Towle,  (1901)  156 
Ind.  639,  59  N.  E.  20,  53  L.  R.  A.  749;  and  the  following  cases  in 
which  live  stock  quarantine  regulations  were  sustained :  State  v. 
Southern  Ry.  Co.,  (1906)  141  N.  C.  846,  54  S.  E.  294;  Commonwealth  v. 
Cooper,  (1902)  27  Pa.  Co.  Ct.  199;  State  v.  Rasmussen,  (1900)  7 
Idaho,  i,  n,  59  Pac.  933,  936.  In  Ex  parte  Cox,  (1883)  63  Cal.  21,  where 
a  statute  was  declared  unconstitutional,  too  broad  a  power  had  been 
granted  to  the  viticultural  commissioners.  In  State  v.  Burdge,  (1897) 
95  Wis.  390,  70  N.  W.  347,  37  L.  R.  A.  ^157,  the  court  may  have  de- 
cided correctly  in  sustaining  the  same  objection  to  a  statute  (as  inter- 
preted by  the  state  board  of  health)  which  dealt  with  dangerous  con- 
tagious diseases.  But  in  Schaezlein  v.  Cabaniss,  (1902)  135  Cal.  466,  67 
Pac.  755,  56  L.  R.  A.  733,  the  court  seems  to  have  been  in  error  in 
declaring  unconstitutional  a  statute  which  provided  that  if  in  any 
factory  there  were  produced  dangerous  substances  that  were  liable  to 
be  inhaled  by  the  employees,  and  it  appeared  to  the  commissioner  of 
labor  statistics  that  by  the  use  of  some  mechanical  contrivance  such 
inhalation  could  be  to  a  great  extent  prevented,  he  should  require  the 
use  of  such  contrivance.  With  that  case  compare,  in  addition  to  the 
cases  cited  above,  Arms  v.  Ayer,  (1901)  192  111.  601,  61  N.  E.  851,  which 
concerned  a  law  conferring  upon  factory  inspectors  power  as  to  the 
erection  of  fire  escapes;  State  v.  Vickens,  (1905)  186  Mo.  103,  84  S.  W. 
908,  which  concerned  a  law  conferring  upon  factory  inspectors  powers 
the  extent  of  which  is  not  clearly  shown  in  the  opinion ;  and  Spiegler  v. 
City  of  Chicago,  (1905)  216  111.  114,  128,  74  N.  E.  718,  722,  which 
concerned  an  ordinance  which  declared  that  devices,  to  be  approved  by 
the  commissioner  of  public  works,  should  be  placed  upon  oil-wagons  to 
prevent  the  spilling  of  oil. 

TS  See  page  16  and  notes  69,  72,  supra;  and  language  of 
court  in  Central  of  Ga.  Ry.  Co.  v.  Railroad  Comn.,  (1908) 
161  Fed.  925,  at  986.  In  Hand  v.  Stapleton,  (1903)  135  Ala.  156,  33  So. 
689,  commissioners  were  directed  to  construct  county  buildings  at  a  new 
location  if  they  should  find  that  the  work  could  be  paid  for  without 
an  increase  in  the  tax  rate.  In  People  v.  Harper,  (1878)  91  111.  357, 
commissioners  were  authorized  to  name  inspection  fees:  the  legislature 


OF   POWERS  IN   THE   CONSTITUTIONS  27 

While  the  courts  have  not  always  sustained  statutes  upon 
those  subjects,  partly  because  some  of  the  statutes  which 
were  declared  unconstitutional  differed  in  character  from 
those  which  were  sustained,  and  partly  because  some  courts 


stated  the  principle  to  be  followed,  though  the  court  does  not  dwell  on 
this  fact  but  sustains  the  statute  with  unsound  reasoning.  In  Lothrop 
v.  Stedman,  (1875)  42  Conn.  (Supp.)  583,  Fed.  Cas.  No.  8519,  a  com- 
missioner was  directed  to  determine  and  announce  whether  a  company 
made  up  a  deficiency  in  its  assets,  thus  avoiding  a  conditional  repeal  of 
its  charter.  Local  option  and  similar  laws  have  been  frequently  sus- 
tained upon  the  ground  that  the  power  delegated  was  merely  that  of 
determining  questions  of  fact.  It  seems  that  that  ground  does  not 
furnish  a  correct  basis  for  those  decisions :  see  note  7,  supra.  It  may, 
possibly,  answer  objections  to  statutes  considered  in  State  v.  Bryan, 
(1905)  50  Fla.  293,  39  So.  929,  953;  Leeper  v.  State,  (1899)  103  Tenn. 
500,  524,  53  S.  W.  962,  967,  48  L.  R.  A.  167,  172;  and  to  some  portions 
of  the  statute  considered  in  In  re  Gilbert  E.  Ry.  Co.,  (1877)  70  N.  Y. 

361,  366,  374;  In  re  New  York  E.  R.  Co.,  (1877)  70  N.  Y.  327,  though  it 
seems  that  other  portions  of  the  New  York  statute  can  be  supported 
better,  if  not  only,  upon  the  ground  that  the  power  was  granted  to 
local    authorities :    see    page    4,    supra.      A    statute    which    authorized 
county   commissioners   to    determine   the   width    of   tires   which   must 
be    used    for    the    transportation    of    heavy    loads    upon    the    public 
roads  of  their  respective  counties,  was  sustained  in  State  v.  Messenger, 
(1900)  63  Ohio  St.  398,  59  N.  E.  105,  not  only  upon  the  ground  that 
a  power  of  local  government  was  thereby  granted  to  local  authorities, 
but  also  upon  the  ground  that  those  authorities  were  directed  to  de- 
termine questions  of  fact.    In  People  v.  Delaware  &  H.  C.  Co.,  (1898) 
32  N.  Y.  App.  Div.  120,  52  N.  Y.  Supp.  850,  affirmed  (1901)  165  N.  Y. 

362,  59  N.   E.   138,  the  court  decided  that  legislative  power  was  not 
delegated  by  a  statute  which  empowered  commissioners,  acting  judi- 
cially, it  was  said,  to  determine  the  necessity  of  railroad  accommoda- 
tions.     And    statutes    authorizing   commissions    to    issue    orders    con- 
cerning  the   construction    and   operation   of   railroads   have   been   en- 
forced without  any  consideration  of  the  question  of  delegation  of  legis- 
lative power  in  a  number  of  cases.  On  the  other  hand,  in  Noel  v.  People, 

(1900)  187  111.  587,  58  N.   E.  616,  the  court  decided  that  legislative 
power  was  delegated  by  a  statute  which  granted  to  a  board  of  phar- 
macy an  unconditional  power  to  say,  as  to  some  parts  of  the  state,  what 
individuals  who  were  not  registered  pharmacists  should  be  permitted  to 
sell  patent  and  proprietary  medicines  and  domestic  remedies,  and  under 
what  restrictions  those  drugs  should  be  sold,  although  the  court  ad- 
mitted the  validity  of  that  part  of  the  statute  which  provided  that  no  one 
might  sell  medicines  which  he  had  prepared  or  compounded  himself 
unless  he  were  a  registered  pharmacist.     And  in  Mathews  v.  Murphy, 

(1901)  23  Ky.  L.  Rep.  750,  63  S.  W.  785,  54  L.  R.  A.  415,  the  court 
decided  that  the  state  board  of  health  might  not  revoke  a  license  to 
practice  medicine  because  of  "grossly  unprofessional  conduct  of  a  char- 
acter calculated  to  deceive  or  defraud  the  public,"  although  admitting 
the  validity  of  that  part  of  the  statute  which  authorized  the  bpard  to 
pass   upon   the   qualifications   of   persons   seeking   licenses   to   practice 
medicine;  yet  it  is  doubtful  whether  that  case  turned  upon  the  ques- 
tion of  delegation  of  legislative  power. 


28  RATE   REGULATION   AND   THE   DISTRIBUTION 

have  taken  a  stricter  view  of  the  limitations  upon  delega- 
tions of  power  by  the  legislature  than  have  been  taken  by 
other  courts,  it  seems  clear  that  constitutional  statutes  upon 
those  subjects  may  be  framed.  Such  questions,  for  in- 
stance, as  the  appropriate  preventive  of  the  spread  of  small 
pox,  and  whether  a  man  possesses  the  normal  qualifications 
of  an  architect,  are  undeniably  questions  of  fact. 

But  there  is  a  clear  difference  between  determining  the 
precise  application  of  a  law  established  by  the  legislature 
and  stating  in  specific  form  a  regulation  which  is  not  the 
application  of  a  law  established  by  the  legislature.  Or,  to 
refer  more  definitely  to  railroad  commissions,  while  a  leg- 
islature certainly  may  authorize  such  a  commission  to  in- 
vestigate questions  concerning  rates  and  to  state  in  specific 
form  the  rates  which  may  be  charged  thereafter,  if  it  has 
clearly  established  the  principles  which  are  to  be  applied  by 
the  commission,  the  cases  which  we  have  just  considered 
do  not  warrant  the  assertion  that  the  legislature  may  en- 
dow the  commission  with  a  wide  discretion  as  to  the  rates 
which  shall  be  fixed.  We  have  seen  from  other  authorities 
that  while  the  legislature  may  authorize  a  commission  to 
ascertain  facts  and  to  apply  the  law  in  accordance  with 
those  facts,  it  must  point  out  the  facts  which  are  to  be  as- 
certained, it  must  determine  the  law  which  is  to  be  ap- 
plied.74 

The  courts  have  also  held  that  a  statute  the  operation  of 
which  depends  upon  a  contingency  does  not  necessarily 
delegate  legislative  power.  It  may  declare  completely  the 
principles  of  governmental  action,  although  other  forces  de- 
termine the  result  of  that  declaration  of  principles.  Thus 
the  treatment  of  a  foreign  corporation  may  be  made  to  de- 
pend upon  the  treatment  which  the  home  state  of  that  cor- 
poration extends  to  corporations  of  the  state  whose  legisla- 
tion is  being  considered;75  commissioners  may  be  author- 


14  See  cases  cited  in  note  26,  supra. 

"People  v.  Fire  Assn.  of  Phila.,  (1883)  92  N.  Y.  311;  Phoenix  I 


OF   POWERS   IN   THE  CONSTITUTIONS  2Q 

ized  to  construct  new  county  buildings  if  they  shall  find 
that  the  work  will  not  require  an  increase  in  the  tax  rate,76 
to  remove  de  facto  a  county  seat  upon  the  erection  of  suit- 
able buildings  at  a  new  location,77  or  to  remove  the  county, 
records  to  another  town  and  erect  a  court  house  there  if 
the  town  or  its  citizens  shall,  to  the  satisfaction  of  the  com- 
missioners and  without  expense  to  the  county,  provide  suit- 
able temporary  accommodations  and  a  suitable  building 
site;78  a  legislature  may  require  a  railroad  company  to  stop 
its  trains  at  a  designated  place  if  individuals  shall,  within  a 
given  time,  there  erect  a  station  building  and  convey  it, 
with  the  land  thereunder,  to  the  company;79  a  legislature 


Co.  v.  Welch,  (1883)  29  Kan.  672;  Home  L  Co.  v.  Swigert,  (1882)  104 
111.  653;  and  see  Talbott  v.  Fidelity  &  C.  Co.,  (1891)  74  Md.  536,  545,  22 
Atl.  395,  398.  Contra,  Clark  6-  Murrel  v.  Port  of  Mobile,  (1880)  67 
Ala.  217.  It  is  submitted  that,  while  the  decisions  in  support  of  the 
statutes  are  sound,  some  of  the  cases  which  the  Kansas  and  Illinois 
courts  cite  with  approval  were  not  legitimate  instances  of  contingent 
legislation.  In  Brig  Aurora  v.  United  States,  (1813)  7  Cranch,  382,  the 
court  sustained  an  act  by  which  an  embargo  resulted  upon  action  by 
Great  Britian.  And  in  Field  v.  Clark,  (1892)  143  U.  S.  649,  12  Sup. 
Ct.  495,  the  court  sustained  a  federal  reciprocity  statute  in  which  the 
contingency  was  not  indicated  as  definitely  as  in  the  above  statutes. 

78  Hand  v.  Staple  ton,  (1903)   135  Ala.  156,  33  So.  689. 

"Peck  v.  Weddell,  (1867)  17  Ohio  St.  271. 

"  Walton  v.  Greenwood,  (1872)  60  Me.  356. 

n  State  v.  New  Haven  &  N.  Co.,  (1876)  43  Conn.  351.  The  court 
gave  but  slight  consideration  to  the  question.  In  Mayor  v.  Clunet, 
(1865)  23  Md.  449,  466-470,  after  a  fuller  discussion,  the  court  sus- 
tained an  ordinance  for  the  opening  of  a  street  which  provided  that  it 
should  not  go  into  effect  until  designated  individuals  had  adjusted 
claims  against  the  city  arising  out  of  a  prior  ordinance  for  the  same 
purpose  which  had  been  repealed  after  it  had  been  partly  executed.  On 
the  other  hand,  in  Owensboro  &  N.  R.  Co.  v.  Todd,  (1891)  91  Ky.  175, 
15  S.  W.  56,  ii  L.  R.  A.  285,  the  court,  without  giving  satisfactory 
reasons,  declared  that  legislative  power  was  delegated  by  an  act  which 
provided  that,  where  land  for  the  right  of  way  had  been  given  to  a 
railroad  company,  the  owners  of  adjoining  lands  might  thereafter  re- 
quire the  company  to  fence  the  right  of  way  at  its  own  expense ;  and 
in  Loughbridge  v.  Harris,  (1871)  42  Ga.  500,  is  an  unmistakably  in- 
correct declaration  that  a  mill  dam  act  delegated  legislative  power.  See 
also  note  39,  supra. — As  a  legislature  does  not  necessarily  allow  an  in- 
dividual to  shape  the  policy  of  the  government  whenever  it  makes  the 
operation  of  a  statute  contingent  upon  his  action  or  decision,  it  seems 
that  it  may  at  times  make  the  operation  of  a  statute  to  depend  upon  his 
decision  whether  or  not  he  will  contribute  from  his  own  possessions  or 
whether  he  will  waive  or  claim  rights  against  other  individuals  or 
against  the  state,  even  though  it  may  not  grant  to  any  one  a  right  to  in- 


3O  RATE  REGULATION  AND  THE  DISTRIBUTION 

may  repeal  the  charter  of  a  company  with  the  proviso  that 
the  repeal  shall  not  go  into  effect  if  the  company  shall  by  a 
named  date  make  up  a  deficiency  in  its  assets  ;80  and,  though 
it  is  questionable  whether  this  is  really  contingent  legisla- 
tion, the  legislature  may  doubtless  empower  individuals  to 
do  certain  acts  without  compelling  them  to  do  so,  as  in  the 
statutes  authorizing  the  formation  of  corporations. 

Yet  obviously  it  does  not  follow  that  because  contingent 
legislation  may  be  constitutional  therefore  a  statute  must  be 
valid  if  its  operation  is  uncertain.  In  the  cases  which  we 
have  already  considered  the  policy  of  the  state  was  deter- 
mined only  by  the  legislature ;  but  it  would  be  far  otherwise 
if  the  contingency  consisted  of  the  will  of  another  organ  of 
government.  It  is  true  that  in  a  number  of  cases  the  courts 
have  sustained  statutes  which  in  reality  delegated  legislative 
power  to  the  voters  or  the  authorities  of  localities,  upon  the 
ground  that  in  each  case  the  operation  of  the  statute  was 
contingent.81  And  yet,  without  criticising  the  actual  deci- 


terfere  with  the  property  or  conduct  of  others  save  for  the  obtaining  of 
rights  which  are  granted  to,  or  already  belonged  to,  himself. — The 
court  in  In  re  New  York  E.  R.  Co.,  (1877)  70  N.  Y.  327,  343,  344,  gave 
an  unsound  reason  for  saying  that  the  commission  must  be  allowed 
to  determine  for  the  incorporators  a  number  of  questions  concerning 
the  organization  of  the  company. 

"°  Lothrop  v.  Stedman,  (1875)  42  Conn.  (Supp.)  583,  Fed.  Cas.  No. 
8519. 

81  See,  e.  g.,  People  v.  McBride,  (1908)  111.,  84  N.  E.  865,  872;  Picton 
v.  Cass  County,  (1904)  13  N.  D.  242,  100  N.  W.  711;  Ansley  v.  Ains- 
worth,  (1902)  4  Ind.  Ter.  308,  69  S.  W.  884;  State  v.  Cooley,  (1896) 


65  Minn.  406,  68  N.  W.  66;  Lum  v.  Mayor,  (1895)  72  Miss.  950,  18  So. 

i  ^     -xx  —          «'    .       . 

Miss.  59,  8  So.  201  \  Clarke  v.  Rogers,  (1883)  81  Ky.  43;  People  v.  City 


476;  State  v.  Pond,  (1887)  93  Mo.  606,  6  S.  W.  469;  People  v.  Hoffman, 
(1886)    116  111.  587,  5  N.  E.  596;  Schulherr  v.  Bordeaux,   (1886)   64 


of  Butte,  (1881)  4  Mont.  174,  I  Pac.  414;  Guild  v.  City  of  Chicago, 
(1876)  82  111.  472;  Fell  v.  State,  (1875)  42  Md.  71;  Locke's  Appeal, 
(1873)  72  Pa.  491;  Alcorn  v.  Hamer,  (1860)  38  Miss.  652  (in  which 
case  the  briefs  were  elaborate)  ;  Bull  v.  Read,  (1855)  13  Gratt.  (Va.) 
78;  Cincinnati,  W.  &  Z.  R.  Co.  v.  Comrs.,  (1852)  i  Ohio  St.  77;  and 
also  State  v.  Fountain,  (1908)  Del.,  69  Atl.  926,  934;  Thalheimer  v. 
Board  of  Suprs.,  (1908)  Ariz.,  94  Pac.  1129;  Ward  v.  State,  (1908) 
Ala.,  45  So.  655;  State  v.  Kline,  (1907)  Ore.,  93  Pac.  237;  Fonts  v.  Hood 
River,  (1905)  46  Ore.  492,  81  Pac.  370,  I  L.  R.  A.  N.  S.  483;  In  re  Neu 
York  E.  R.  Co.,  (1877)  70  N.  Y.  327;  State  v.  O'Neill,  (1869)  24  Wis. 
149;  State  v.  Hunter,  (1888)  38  Kan.  578,  17  Pac.  177  (in  which  case  the 
appointment  of  commissioners  and  the  exercise  of  powers  by  them 


OF   POWERS  IN  THE  CONSTITUTIONS  3! 

sions,  we  must  note  that  not  only  does  the  reason  given  in 
support  of  them  appear  to  be  insufficient  when  considered 
by  itself,82  but  its  unsoundness  is  further  shown  by  the  fact 
that  if  the  statutes  were  sustainable  only  upon  that  reason 
the  decisions  would  be  flatly  inconsistent  with  the  decisions 
that  the  legislature  may  not  submit  to  the  voters  of  the 
entire  state  the  question  whether  or  not  a  law  shall  become 
operative.83  On  the  other  hand,  no  question  of  the  con- 
sistency of  the  two  lines  of  decisions  could  arise  if  the  for- 
mer had  been  based  upon  the  ground  that  the  legislature 
may  grant  some  self-government  to  the  localities.84 

Nor  may  any  right  of  the  legislature  to  submit  the  ques- 
tions whether  or  when  a  statute  shall  be  executed85  be  based 


were  acts  administrative  in  their  nature  for  the  improvement,  where 
necessary,  of  the  execution  of  a  law  the  excution  of  which  had  been 
already  ordered);  Cooley,  Constitutional  Limitations,  7th  ed.,  167; 
Sutherland,  Statutory  Construction,  2d  ed.,  p.  170;  Oberholtzer,  The 
Referendum  in  America,  328.  In  some  of  the  earlier  decisions,  while 
the  courts  hold  that  the  statutes  are  constitutional,  they  apparently 
consider  that  a  statute  may  be  so  worded  that  after  a  vote  is  taken  the 
constitutionality  of  a  condition  subsequent  will  be  unimportant :  that  in 
case  of  a  vote  to  enforce  the  law  the  condition  may  be  ignored :  see 
State  v.  Parker,  (1857)  26  Vt.  357,  363;  Alcorn  v.  Hamer,  (1860)  38 
Miss.  652;  although  in  case  of  a  contrary  vote,  whether  the  condition 
were  constitutional  or  not,  the  statute  could  not  be  enforced. 

82  The  distinction  between  valid  and  invalid  contingent  legislation  is 
further  brought  out  in  People  v.  Fire  Assn.  of  Phila.,  (1883)  92  N.  Y. 
311,  322,  323;  Barto  v.  Himrod,  (1853)  8  N.  Y.  483,  490,  495;  Ex 
parte  Wall,  (1874)  48  Cal.  279,  315;  Central  of  Ga.  Ry.  Co.  v.  Railroad 
Comn.,  (1908)  161  Fed.  925,  986. 

88  See  note  87,  infra. 

84  See  page  4,  supra. 

85  On  the  point  that  it  was  not  the  statute  but  the  operation  of  the 
statute  which  was  contingent,  see  Cincinnati,  W.  &  Z.  R.  Co.  v.  Comrs., 
(1852)   i  Ohio  St.  77;  Locke's  Appeal,  (1873)   72  Pa.  491;  Picton  v. 
Cass  County,  (1904)   13  N.  D.  242,  100  N.  W.  711;  Clarke  v.  Rogers, 
(1883)  81  Ky.  43;  People  v.  City  of  Butte,  (1881)  4  Mont.  174,  i  Pac. 
414;  People  v.  Reynolds,  (1848)  5  Gil.  (111.)  i;  State  v.  Kline,  (1907) 
Ore.,  93  Pac.  237.    In  the  Ohio  case  the  court  said,  p.  88,  "The  law  is, 
therefore,  perfect,  final,  and  decisive  in  all  its  parts,  and  the  discretion 
given  only  relates  to  its  execution.     It  may  be  employed  or  not  em- 
ployed ;  if  employed,  it  rules  throughout ;  if  not  employed,  it  still  re- 
mains the  law,  ready  to  be  applied  whenever  the  preliminary  condition  is 
performed.     The  true  distinction,  therefore,  is  between  the  delegation 
of  power  to  make  the  law,  which  necessarily  involves  a  discretion  as 
to  what  it  shall  be,  and  conferring  an  authority  or  discretion  as  to  its 
execution,  to  be  exercised  under  and  in  pursuance  of  the  law.    The  first 


32  RATE  REGULATION  AND  THE  DISTRIBUTION 

upon  its  undoubted  right  to  allow  administrative  bodies  to 
decide  some  questions  concerning  the  execution  of  statutes 
which  do  not  involve  the  desirability  of  governmental  ac- 
tion.86 

As  just  stated,  the  weight  of  authority  is  decidedly  against 
the  constitutionality  of  a  submission  to  the  voters  of  the 
entire  state  of  the  question  whether  or  not  a  law  shall  be- 
come operative;87  and  yet  a  concession  of  the  validity  of 
such  legislation  would  not  involve  a  concession  of  the  valid- 
ity of  legislation  which  should  grant  a  similar  veto  power 
to  an  administrative  organ.  And  even  if  the  legislature 
after  framing  an  otherwise  complete  statute  might  allow 
an  administrative  organ  to  decide  whether  or  not  that  stat- 
ute should  be  enforced,  it  would  not  necessarily  follow  that 
the  legislature  might  allow  such  an  organ  to  decide  upon 
the  terms  of  a  statute,  although  unless  that  power  were 
grantable  the  legislature  might  not  bestow  upon  an  admin- 
istrative organ  any  power  over  railroad  rates  further  than 
to  apply  regulations  made  by  the  legislature. 

In  view  of  the  cases  as  to  the  contingent  treatment  of 
foreign  corporations,  it  seems  that  a  state  might  make  the 
local  railroad  rates  to  depend  upon  the  rates  which  the  fed- 
eral government  might  establish  for  interstate  transporta- 
tion, and,  conversely,  the  federal  government  might  make 
the  interstate  rates  to  depend  upon  the  rates  which  the 
states  might  establish  for  local  transportation.88  This 


can  not  be  done;  to  the  latter  no  valid  objection  can  be  made."  Ob- 
serve the  phraseology.  But  while  the  legislature  unquestionably  may 
grant  the  power  to  use  some  discretion  when  executing  a  statute,  yet, 
except  where  legislative  power  may  be  delegated,  valid  objection  cer- 
tainly can  be  made  to  a  grant  of  discretion  as  to  whether  or  not  a 
statute  shall  be  executed. 

"  See  note  22,  supra. 

"See  Oberholtzer,  The  Referendum  in  America,  208-217;  Cooley, 
Constitutional  Limitations,  7th  ed.,  168  et  seq.;  6  A.  &  E.  Enc.  of  L., 
2d  ed.,  1022. 

"This  does  not  mean  that  a  state  legislature  might  in  all  cases 
make  local  rates  depend  upon  interstate  rates  established  by  the  car- 
riers, or,  conversely,  that  Congress  might  in  all  cases  make  inter- 
state rates  depend  upon  local  rates  established  by  the  carriers.  The 
commerce  clause  would  at  times  affect  such  legislation.  Louisville  & 


OF  POWERS  IN   THE  CONSTITUTIONS  33 

would  certainly  be  true  if  we  could  be  sure  that  after  such 
a  law  was  passed  the  basic  rates  would  in  every  instance 
be  established  simply  with  a  view  to  their  effect  upon  the 
transportation  subject  to  the  sovereignty  establishing  them 
and  without  regard  to  their  effect  upon  rates  not  subject 
to  that  sovereignty.  And  it  is  questionable  whether,  when 


N.  R.  Co.  v.  Eubank,  (1902)  184  U.  S.  27,  22  Sup.  Ct.  277,  which  arose 
under  that  clause,  decides  that  a  state  may  not  forbid  a  railroad  to 
charge  more  for  carrying  between  two  points  within  the  state  than  it 
charges  for  a  longer  interstate  haul  which  includes  the  shorter  route, 
when  the  prohibition  would  have  a  direct  effect  upon  interstate  com- 
merce.   The  company  was  commanded  to  change  the  rate  for  either  the 
local  or  the  interstate  haul.    In  the  case  considered  the  earnings  from 
the  local  haul  were  more  important.    Therefore,  rather  than  lower  its 
local  rate,  the  company  would  have  raised  its  interstate  rate,  although 
on  its  so  doing  its  competitors  would  have  secured  its  interstate  traffic. 
It  seems,  however,  that  if  the  local  earnings  had  been  less  important 
than  the  interstate  earnings  the  court  should  have  held  that  the  regula- 
tion did  not  violate  the  commerce  clause,  for  in  that  case  the  company 
would  have  retained  its  interstate,  and  lowered  its  local,  rate,  which 
was  probably  the  main  result  sought  by  the  state.    It  seems  also  that  if 
a  minimum  interstate  rate  had  been  fixed  by  the  federal  government, 
and,  therefore,  that  rate  could  not  have  been  reduced  by  the  carrier, 
the  long  and  short  haul  provision  should  have  been  sustained,  for  it 
would  have  affected  only  the  changeable  rate — that   for  the   shorter, 
and  not  for  the  interstate,  haul.    The  court  lends  support  to  this  posi- 
tion by  referring  to  a  hypothetical  case  in  which  local  rates  are  fixed 
by  state  statute  and  then  saying,  "Congress  does  not  interfere  with 
local  rates  by  adopting  their  sum  as  the  interstate  rate."  These  words, 
of  course,  must  be  read  in  their  proper  connection,  for  if  they  referred 
to  local  rates  which  are  fixed  by  the  carrier  the  dictum  would  be  in- 
consistent with  the  decision  in  the  case  under  consideration.     If  Con- 
gress were  allowed  to  adopt  as   the   interstate  rate  the   sum  of  the 
local  rates  established  by  the  carrier  it  might  in  some  cases  directly  af- 
fect local  rates,  according  to  the  present  decision,  and  Congress  may 
not  interfere  with  local  commerce  to  any  greater  extent  than  the  states 
may  interfere  with  interstate  commerce :  the  Tenth  Amendment  is  fully 
as  much  a  part  of  the  federal  Constitution  as  is  the  eighth  section  of 
Article  I.     It  seems,  therefore,  that  if  Congress  should  declare  that 
through  rates  should  be  the  sum  of  the  local  rates  as  fixed  by  the  car- 
riers the  question  whether  the   act  could  constitutionally  be   applied 
should  depend  in  each  case  on  whether  the  local  earnings  or  the  inter- 
state earnings  were  of  more  importance  to  the  carrier.    It  is  true  that 
the  view  of  the  case  taken  in  this  note  does  not  thoroughly  coincide 
with  that  taken  in  portions  of  the  opinion.    Thus  the  court  says,  "The 
vice  of  the  provision  lies  in  the  regulation  of  the  rates  between  points 
wholly  within  the  state,  by  the  rates  which  obtain  between  points  out- 
side of  and  those  which  are  within  the  state."     But  both  earlier  and 
later  in  the  opinion  the  decision  is  based  on  the  effect  of  the  regulation, 
and  the  facts  of  the  case  do  not  warrant  reference  to  it  for  the  es- 
tablishment of  any  other  test  of  constitutionality. 


34  RATE  REGULATION  AND  THE  DISTRIBUTION 

considering  an  alleged  delegation  of  power,  a  court  might 
inquire  into  the  motive  underlying  the  establishment  of  the 
basic  rates. 

It  may  be  conceded  that  the  federal  statute  which  pro- 
vides that,  in  cases  where  they  apply,  the  laws  of  the  sev- 
eral states  shall  be  regarded  by  the  federal  courts  as  rules 
of  decision  in  trials  at  common  law89  is  hardly  in  point, 
for  so  far  as  substantive  law  is  concerned  Congress  could 
not  constitutionally  have  provided  otherwise.90  And  hardly 
analogous  is  the  federal  statute  which  provides  that,  in 
common  law  causes,  the  circuit  and  district  courts  shall 
enforce  such  remedies  upon  judgments  as  were,  at  the  time 
the  statute  was  enacted,  provided  by  the  laws  of  the  states 
within  which  those  courts  are  held  and  such  remedies  upon 
judgments  as  were  or  may  be  subsequently  provided  by 
state  laws  and  adopted  by  general  rules  of  those  courts.91 
Nor  is  that  statute  analogous  which  provides  that,  in  civil 
causes  other  than  equity  and  admiralty  causes,  those  courts 
shall  follow  as  nearly  as  may  be  the  procedure  in  the  courts 
of  record  of  the  states  within  which  such  circuit  and  dis- 
trict courts  are  held,  any  rule  of  court  to  the  contrary  not- 
withstanding.92 The  latter  statute,  which,  if  it  were  inter- 


89  Rev.  Stats.,  sec.  721;  4  Fed.  Stats.  An.  517;  Rose,  Code  of  Federal 
Procedure,  sec.  12. 

90  See  Patterson,  The  United  States  and  the  States  Under  the  Con- 
stitution, 2d  ed.,  sec.  109;  Rose,  Code  of  Federal  Procedure,  sees.  10, 
notes  a,  r,  799,  note  c.    And  those  laws  must  also  be  so  regarded  in 
trials  in  chancery. 

91  Rev.  Stats.,  sec.  916;  4  Fed.  Stats.  An.  580;  Rose,  Code  of  Federal 
Procedure,  sec.  925;  Fink  v.  O'Neil,  (1882)   106  U.  S.  272,  i  Sup.  Ct. 
325;  Ex  parte  Boyd,  (1882)  105  U.  S.  647,  651;  Ross  v.  Duval,  (1839) 
13  Pet.  45;   Wayman  v.  Southard,   (1825)    10  Wheat,  i;  Bank  of  the 
U.  S.  v.  Halstead,  (1825)   10  Wheat.  51.    In  spite  of  the  decisions  and 
the  language  of  Marshall,  C.  J.,  in  Wayman  v.  Southard,  10  Wheat,  at 
49,  50,  it  does  not  seem  clear  that,  in  a  case  in  which  the  jurisdiction  is 
based  upon  the  diverse  citizenship  of  the  parties,  a  federal  court  may 
constitutionally  ignore  a  then-existing  state  law,   for  example,  as   to 
stays  of  execution  or  exemptions  from  execution,  if  the  state  is  not 
seeking  to  thwart  the   federal  remedy  by  allowing  a  special  stay  or 
exemption  to  such  defendant  or  defendants.     See  also  Rev.  Stats.,  sec. 
915;  4  Fed.  Stats.  An.  577;  Rose,  Code  of  Federal  Procedure,  sec.  905. 

92  Rev.  Stats.,  sec.  914;  4  Fed.  Stats.  An.  563;  Rose,  Code  of  Federal 
Procedure,  sec.  900. — Consider  also  2  Am.  Pol.  Sci.  Rev.  364. 


OF   POWERS   IN   THE  CONSTITUTIONS  35 

preted  in  accordance  with  its  probable  meaning,  would  al- 
low the  state  authorities  incidentally  to  change  the  proced- 
ure in  federal  courts,93  might  possibly  be  sustained  upon  the 
ground  upon  which  were  sustained  the  less  sweeping  earlier 
statutes  which  merely  adopted  the  procedure  then  followed 
by  state  courts  and  authorized  the  federal  courts  to  alter 
and  add  to  such  rules:94  the  Supreme  Court  said  that  the 
providing  of  such  rules  was  not  an  act  exclusively  legisla- 
tive in  character  and  might  be  entrusted  to  the  courts  con- 
cerned.95 The  statute  under  consideration,  however,  has 
been  so  interpreted  by  the  Supreme  Court  as  to  make  it 
unnecessary  for  federal  courts  to  follow  the  procedure  in 
the  courts  of  record  of  the  states  within  which  the  federal 
courts  are  held.96 

But  while  the  determination  of  the  principles  upon  which 
rates  shall  be  regulated  is  exclusively  legislative  in  its  char- 
acter, and  might  not  be  entrusted  by  the  state  legislatures 
to  Congress  or  by  Congress  to  the  state  legislatures,  it  seems 
that  a  legislative  body  would  not  be  delegating  its  power  if 
it  provided  that  rates  which  were  subject  to  it  should  be 
affected  as  the  merely  incidental  result  of  regulation  by  the 
legislature  of  another  sovereignty  of  rates  which  were  sub- 
ject to  regulation  by  that  other  body. 

**  Not,  however,  of  course,  where  the  federal  courts  would  thereby 
be  required  to  act  contrary  to  the  federal  Constitution  or  a  federal 
statute:  see  Rose,  Code  of  Federal  Procedure,  sec.  900,  note  f. 

M  Rose,  Code  of  Federal  Procedure,  sec.  900,  notes  a,  aa. 

*5Of  course,  it  does  not  necessarily  follow  that,  because  the  legisla- 
ture may  entrust  a  power  to  the  organ  concerned,  the  legislature  may 
entrust  that  power  to  a  third  authority.  Still,  so  far  at  least  as  regards 
cases  in  which  federal  courts  acquire  jurisdiction  by  reason  of  the 
diverse  citizenship  of  the  parties,  the  statutes  under  consideration 
obviously  carry  out  the  purpose  for  which  jurisdiction  was  granted  to 
the  federal  courts  far  better  than  would  any  statutes  which  established 
uniform  rules  of  procedure  and  uniform  remedies  upon  judgments 
throughout  the  entire  country. 

"See  Boston  &  M.  R.  v.  Gokey,  (1908)  210  U.  S.  155,  28  Sup.  Ct. 
657 ;  case  there  cited ;  Rose,  Code  of  Federal  Procedure,  sec.  805,  begin- 
ning of  note  b,  sec.  900,  note  g.  Rev.  Stats.,  sec.  914,  was  taken  from  a 
statute  enacted  much  later  than  that  from  which  Rev.  Stats.,  sec.  918, 
was  taken,  and  the  courts,  in  interpreting  the  Revised  Statutes,  ought 
to  give  weight  to  that  fact.  See  note  at  4  Fed.  Stats.  An.  585,  on  the 
operation  of  sec.  914. 


36  RATE  REGULATION  AND  THE  DISTRIBUTION 

The  courts  have  also  at  times  sustained  legislation  which 
granted  discretion  to  administrative  organs.  Where  the 
discretion  granted  was  not  great97  the  decisions  are  prob- 
ably correct,  for  the  legislature  cannot  be  expected  to  de- 
termine every  unimportant  question  which  may  arise.  But 
other  decisions  which  sustain  larger  grants  of  discretion98 


"See,  e.  g.,  State  v.  Wagener,  (1899)  77  Minn.  483,  80  N.  W.  633, 
46  L.  R.  A.  442;  In  re  Kollock,  (1897)  165  U.  S.  526,  17  Sup.  Ct.  444; 
language  used  in  Wayman  v.  Southard,  (1825)  jo  Wheat,  i,  43,  quoted 
in  note  67,  supra;  10  Wheat  45,  46;  Jermyn  v.  Fowler,  (1898)  186  Pa. 
595,  40  Atl.  972,  where  one  of  the  two  inconsistent  positions  taken  by 
the  court  was  that  the  board  might  be  granted  a  discretion  as  to 
matters  of  detail;  and  also  St.  Louis,  I.  M.  &  S.  Ry.  Co.  v.  Neal, 
(1906)  Ark.,  98  S.  W.  958,  961;  State  v.  Bryan,  (1905)  50  Fla.  293,  39 
So.  929,  953;  Woodruff  v.  New  Y.  &  N.  E.  R.  Co.,  (1890)  59  Conn.  63, 
84,  20  Atl.  17,  19;  St.  Louis,  I.  M.  6-  S.  Ry.  Co.  v.  Taylor,  (1908)  210 
U.  S.  281,  287,  26  Sup.  Ct.  616,  617;  In  re  Opinion  of  Justices,  (1907) 
N.  H.,  68  Atl.  873.  Compare  Fife  v.  State,  (1905)  114  Tenn.  646,  658, 
659,  88  S.  W.  941,  944,  i  L.  R.  A.  N.  S.  520,  525;  Central  of  Ga.  Ry. 
Co.  v.  Railroad  Comn.,  (1908)  161  Fed.  925,  985;  other  cases  cited  in 
note  26,  supra;  and  State  v.  Burdge,  (1897)  95  Wis.  390,  70  N.  W.  347, 
37  L.  R.  A.  157- 

M  Brady  v.  Mattern,  (1904)  125  Iowa,  158,  100  N.  W.  358.  (The 
court  overlooks  the  insurance  commissioner  cases,  cited  in  note  26, 
supra,  and  it  cites  Ryan  v.  Outagamie  County,  (1891)  80  Wis.  336,  50 
N.  W.  340,  although  the  reason  given  for  the  Wisconsin  decision  is 
flatly  in  conflict  with  that  on  which  the  Iowa  decision  is  based.  The 
opinion  in  the  Iowa  railroad  commission  case,  which  is  one  of  the 
two  commission  cases  cited,  does  not  mention  the  question  of  delega- 
tion of  legislative  power.)  State  v.  Preferred  T.  M.  Co.,  (1904)  184 
Mo.  160,  82  S.  W.  1075.  (The  court  says  that  in  an  earlier  Missouri 
case  an  act  requiring  a  uniform  policy  of  insurance,  to  be  approved 
by  the  Superintendent  of  Insurance,  was  held  to  be  constitutional, 
although  in  that  case  the  court  did  not  hold  that  the  act  was  constitu- 
tional; it  cites  an  insurance  company  case  which  has  nothing  to  do  with 
the  question;  and  it  cites  a  case  upholding  the  validity  of  an  ordinance 
which  provided  for  the  licensing  of  engineers.)  The  decisions  in 
Kingman  et  al.,  Petitioners,  (1891)  153  Mass.  566,  27  N.  E.  778,  12 
L.  R.  A.  417  (compare  State  v.  Hudson  Co.  Ave.  Comrs.,  (1874)  37 
N.  J.  L.  12,  19;  the  Massachusetts  case  was  followed  in  later  cases  in 
the  same  state,  cited  in  L.  R.  A.  Cases  as  Authorities)  ;  Martin  v. 
Witherspoon,  (1882)  135  Mass.  175  (no  authorities  cited;  compare 
Board  of  Harbor  Comrs.  v.  Excelsior  R.  Co.,  (1891)  88  Cal.  491,  26 
Pac.  375)  ;  Ingram  v.  State,  (1864)  39  Ala.  247  (no  authorities  cited)  ; 
In  re  Senate  Bill,  (1889)  12  Colo.  188,  21  Pac.  481  (where,  however, 
it  does  not  appear  that  the  general  question  of  delegation  of  legislative 
power  was  considered),  are  also  unsound.  The  constitutionality  of 
the  acts  considered  in  Arnett  v.  State,  (1907)  168  Ind.  180,  80  N.  E. 
153,  8  L.  R.  A.  N.  S.  1192;  State  v.  Missouri  P.  Ry.  Co.,  (1907)  Kan., 
92  Pac.  606;  State  v.  Barringer,  (1892)  no  N.  C.  525,  14  S.  E.  781; 


OF   POWERS  IN   THE   CONSTITUTIONS  37 

can  be  supported  only  on  the  assumption  that  the  legislature 
may  delegate  legislative  power  upon  important  subjects 
which  it  may  specify;  and  in  still  other  cases  (among  them 
the  oft-cited  Ohio  case  in  which  the  court  sustained  a  stat- 
ute allowing  the  people  of  the  respective  counties  to  decide 
whether  or  not  county  bonds  should  be  issued  in  aid  of 
railroad  construction)99  while  the  decisions  are  doubtless 
sound  the  reasoning  upon  which  those  decisions  are  based 
can  be  supported  only  upon  the  same  assumption. 

If,  where  an  administrative  organ  received  large  grants 
of  discretion,  it  adopted  principles  sufficient  to  afford  it  com- 


People  v.  Dunn,  (1889)  80  Cal.  211,  22  Pac.  140,  is  not  clear.  Compare 
Central  of  Ga.  Ry.  Co.  v.  Railroad  Comn.,  (1908)  161  Fed.  925,  985, 
where  the  court  declared  unconstitutional  a  state  law  in  which  an 
attempt  was  made  to  confer  upon  a  commission  a  large  amount  of 
discretion  as  to  rates. 

99  See  note  85,  supra.  The  decision  in  Picton  v.  Cass  County,  (1904) 
13  N.  D.  242,  TOO  N.  W.  711,  is  sound,  but  the  reason  given  for  it  is 
not,  unless  the  fact  that  the  resources  of  the  state  were  involved  con- 
stitutes an  exceptional  circumstance.  The  same  reason  had  been 
improperly  given  in  a  number  of  cases  cited  in  that  opinion.  In  State 
v.  Hagood,  (1888)  30  S.  C.  519,  9  S.  E.  686,  3  L.  R.  A.  841,  where  a 
statute  provided  that  licenses  to  mine  within  the  public  domain  might 
be  granted  or  refused  by  the  Board  of  Agriculture  according  to  its 
judgment  as  to  the  best  interests  of  the  state,  the  court  refused  the 
petition  of  a  mining  company  for  a  mandamus  compelling  the  board  to 
grant  a  license;  and  in  United  States  v.  Williams,  (1887)  6  Mont.  379, 
12  Pac.  851,  where  an  act  of  Congress  provided  that  timber  growing 
on  the  public  lands  might  be  cut  subject  to  such  regulations  as  the 
Secretary  of  the  Interior  might  prescribe  for  the  protection  of  the 
undergrowth  "and  for  other  purposes,"  the  court  sustained  an  action 
for  the  value  of  timber  cut  in  violation  of  law.  In  each  case  the  court 
said  that  legislative  power  was  not  delegated  to  administrative  officers. 
It  seems  that  that  reason  was  unsound,  and  that  the  courts  should, 
instead,  have  said  merely  that  the  absence  of  valid  statutes  did  not 
warrant  the  appropriation  of  public  property  by  individuals. — In  several 
cases,  e.  g.,  People  v.  Grand  T.  W.  Ry.  Co.,  (1908)  232  111.  292,  298,  83 
N.  E.  839,  842;  Chicago,  B.  &  Q.  R.  Co.  v.  Jones,  (1894)  149  111.  361, 
378,  37  N.  E.  247,  251,  24  L.  R.  A.  141,  145;  and  see  cases  there  cited 
and  Wayman  v.  Southard,  (1825)  10  Wheat,  i,  43;  the  courts  have  said 
that  a  legislature  "may  authorize  others  to  do  those  things  which  it 
might  properly,  yet  cannot  understandingly  or  advantageously,  do 
itself."  Undoubtedly  a  legislature  may  delegate  to  others  some  powers 
which  it  might  rightfully  exercise  itself.  But  the  statement,  which  is 
worthless  as  a  test  of  constitutionality,  cannot  properly  mean  that 
where  a  legislature  cannot  advantageously  enact  specific  regulations  it 
may  empower  others  to  make  such  regulations  without  the  guidance  of 
legislatively-established  principles. 


38  RATE  REGULATION   AND  THE  DISTRIBUTION 

plete  guidance  and  announced  those  principles  as  publicly 
and  as  formally  as  laws  are  announced,  it  would  be  clear  to 
most  persons  that  that  organ  was  exercising  power  which 
is  strictly  legislative.  And  where  the  reasons  for  adminis- 
trative decisions  are  not  announced  in  advance  or  where 
that  organ  does  not  decide  in  advance  upon  any  guiding 
principles  whatever  its  determinations  are  fully  as  legisla- 
tive in  their  nature.100  The  fact  that  no  act  legislative  in 
character  preceded  its  determinations  in  specific  cases  can- 
not make  those  determinations  valid.  The  legislature  alone 
has  power  to  change  the  requirements  of  the  government 
as  to  the  conduct  of  individuals;  and  while  the  legislature, 
though  it  may  state  its  requirements  in  specific  form,  need 
not  do  so,  but  may  entrust  that  power  to  an  administrative 
organ  if  the  legislature  itself  ordains  the  principles  from 
which  those  specific  rules  may  be  deduced,  an  administra- 
tive organ  would  exercise  legislative  power  if  it  enforced 
rules  which  were  not  based  upon  principles  established  by 
the  legislature  or  if  it  interfered  with  the  conduct  of  in- 
dividuals without  the  previous  establishment  of  any  rule 
whatever. 

Of  course,  if  there  were  only  one  degree  and  character 
of  rate  regulation  which  a  legislature  might  constitutionally 
ordain,  it  would  be  sufficient  for  the  legislature  simply  to 
create  a  commission  and  empower  it  to  name  specific  rates. 
Further  directions  would  be  unnecessary.  But  it  is  obvi- 
ous that  there  are  constitutionally  possible  regulations  of 


100  Of  course  where  no  uniform  rules  are  adopted  the  danger  of 
injustice  is  far  greater  than  where  they  are  adopted.  The  adminis- 
trative organ  may  act  not  merely  at  haphazard,  but  with  partiality,  and 
the  opportunity  to  work  great  injustice  through  partiality  gives  to 
persons  who  may  be  unscrupulous  a  means  of  keeping  themselves  in 
misused  power.  The  danger  is  a  real  one.  It  would  be  far  easier  for 
that  organ  to  act  with  dishonest  motives  than  it  would  be  to  prove  such 
motives  so  clearly  as  to  warrant  a  court  in  restraining  the  action  upon 
that  ground.  And  if  the  opportunity  to  work  such  injustice  might 
constitutionally  be  given  to  an  administrative  organ,  no  assumption  by 
the  judiciary  of  an  unrestrained  veto  power — which  is  not  granted  to 
the  judiciary  by  the  constitutions — would  be  sufficient  to  prevent  such 
an  evil. 


OF   POWERS  IN   THE   CONSTITUTIONS  39 

rates  which  differ  in  extent  and  character.  The  legislature 
may  seek  merely  to  prevent  manifestly  extortionate  or  man- 
ifestly discriminatory  charges ;  or  it  may,  within  broad  con- 
stitutional limits,  go  further  and,  disregarding  the  question 
whether  the  rates  and  the  relations  between  rates  which 
have  been  fixed  by  the  carriers  are  manifestly  improper  in 
themselves,  it  may  command  that  the  rates  and  the  rela- 
tions between  rates  be  made  to  conform  to  principles  of 
public  policy  laid  down  by  the  legislature.101  And,  of 
course,  in  deciding  upon  the  policy  to  be  followed  and  in 
settling  the  claims  of  conflicting  interests,  there  are  abun- 
dant opportunities  for  differences  of  opinion  and  there  are 
at  least  several  possible  solutions  of  the  questions  at  issue. 


101  As  Mr.  Victor  Morawetz  said  before  the  Senate  Committee  on 
Interstate  Commerce  on  April  18,  1905,  "The  expressions  'reasonable 
rates'  and  'unreasonable  rates'  are  often  used  in  very  different  senses. 
Thus,  when  it  is  said  that  a  rate  shall  be  reasonable,  this  may  mean  (i) 
that  the  rate  shall  not  be  unreasonably  high  and  illegal  under  the 
common  law  and  the  interstate  commerce  act,  or  (2)  that  the  rate  shall 
not  be  unreasonably  low  in  the  sense  of  being  confiscatory,  or  (3) 
that  the  rate  shall  be  the  particular  rate  which,  in  the  opinion  of  a 
commission  or  of  some  particular  person,  ought  to  be  established 
between  these  two  extremes."  "There  is  a  wide  range  between  a  rate 
that  is  unreasonably  high,  and  therefore  illegal  as  against  the  shipper, 
and  a  rate  that  is  so  low  as  to  be  confiscatory  as  against  the  carrier. 
For  example :  assuming  that  a  railway  company  may  charge  40  cents  a 
hundred  pounds  for  carrying  a  given  article  between  two  points  without 
making  the  rate  unreasonably  high  and  therefore  illegal,  it  is  quite 
possible  that  this  rate  might  be  reduced  by  legislative  action  to,  say,  30 
cents  a  hundred  pounds  without  violating  any  constitutional  right  of 
the  carrier.  In  this  case  the  maximum  rate  which  would  be  reasonable 
and  which  could  be  imposed  by  the  carrier  upon  the  shipper  would  be 
40  cents  a  hundred  pounds,  and  the  minimum  rate  which  could  be 
imposed  by  the  legislature  on  the  railway  company  would  be  30  cents  a 
hundred  pounds."  As  the  legislature  may  prohibit  rates  which  are 
extortionate  and  may  prescribe  rates  which  are  not  confiscatory,  there 
is  no  reason  whatever  to  doubt  that  the  legislature  may  itself  fix  rates 
anywhere  between  those  extremes,  and  that  it  may  authorize  a  com- 
mission to  fix  rates  at  any  point  between  those  extremes  if  the  legisla- 
ture declares  what  that  point  shall  be. — The  opinion  in  Trustees  v. 
Saratoga  G.,  E.  L.  &  P.  Co.,  (1908)  191  N.  Y.  123,  83  N.  E.  693,  700, 
does  not  call  for  serious  consideration.  The  court  apparently  over- 
looked the  fact  that  a  legislature  may  itself  name  specific  rates,  and 
did  not  realize  that  the  word  "reasonable"  is  used  in  more  than  one 
sense.  And  in  Interstate  C.  S.  Ry.  Co.  v.  Commonwealth,  (1907)  207 
U.  S.  79,  86,  28  Sup.  Ct.  26,  27,  Holmes,  J.,  apparently  did  not  give 
sufficient  consideration  to  the  use  of  the  word  "reasonable."  On  that 
point  he  spoke  only  for  himself. 


40  RATE  REGULATION   AND  THE  DISTRIBUTION 

For  the  problems  involved  in  rate  regulation  are  compli- 
cated and  important.  A  legislature,  in  deciding  upon  prin- 
ciples of  regulation,  may  affect  economic  conditions  within 
the  territory  subject  to  it  at  least  as  greatly  as  they  could 
be  affected  by  any  possible  changes  in  the  federal  tariff.102 
Since,  therefore,  there  is  a  wide  range  of  possible  differ- 
ences in  the  extent  and  character  of  regulations,  it  neces- 
sarily follows  that,  unless  legislative  power  may  be  dele- 
gated, when  the  legislature  entrusts  to  a  commission  the 
power  of  naming  specific  rates,  it  must  state  definitely  what 
principles  are  to  be  made  effective  by  that  commission. 

Some  of  the  courts  which  have  sustained  statutes  author- 
izing commissions  to  name  railroad  rates  have  thought, 
more  or  less  clearly,  that  in  those  statutes  the  legislatures 
had  declared  what  the  law  should  be  and  had  left  to  the 
commissions  merely  the  enforcement  of  legislation.  We 


102  For  example,  a  change  in  the  relation  between  the  rates  charged 
on  carload  lots  and  those  charged  on  less  than  carload  lots  may  cause 
the  building  up  of  a  jobbing  business  or  may  cause  the  following  of 
different  methods  of  distribution;  a  change  in  the  relation  between 
raw  and  manufactured  products,  as  between  grain  and  flour  or  live 
stock  and  dressed  meat,  may  cause  a  shifting  in  the  location  of  a 
manufacturing  industry;  a  change  in  the  relation  between  products 
which  can  at  times  be  substituted  for  each  other,  as  between  the  various 
kinds  of  building  materials  or  the  various  kinds  of  food  stuffs,  may 
seriously  affect  the  producers;  and  a  change  in  the  relation  between 
different  termini  may  cause  the  decay  of  one  community  and  the 
upbuilding  of  another.  A  change  of  rate  upon  one  road  may  be 
important  mainly  because  of  the  change  in  relation  to  rates  charged 
by  another  road  which  carries  products  from  a  competing  source  of 
supplies  or  to  a  competing  market  in  a  different  part  of  the  country. 
Of  course,  where  the  rates  imposed  by  the  government  are  merely 
maximum  and  not  absolute  the  carrier  may  be  able  to  allow  the  relation 
between  the  rates  actually  charged  to  remain  the  same.  But  any 
change  in  the  relation  between  rates  does  affect  economic  conditions 
and  may  affect  them  seriously. — And  even  when  no  question  of  the 
relation  between  rates  is  involved,  a  change  in  rates  may  have  a  serious 
effect  upon  the  producers  as  well  as  upon  the  railroad  and  upon  the 
consumers.  Passing  over  the  more  obvious  illustrations — a  reduction 
in  the  rates  chargeable  may  make  it  necessary  for  the  carrier  to  reduce 
its  operating  expenses,  delaying  transportation  in  each  case  until  there 
accumulates  an  amount  of  freight  nearer  to  the  maximum  hauling 
capacity  of  its  engines,  in  that  way  giving  to  the  large  producer  or  the 
producer  at  a  large  shipping  centre  an  advantage  over  a  competitor 
who  produces  less  or  who  is  less  favorably  situated. 


OF   POWERS   IN   THE   CONSTITUTIONS  4! 

have  gathered  together  the  cases  in  which  the  courts  took 
that  position  and  have  shown  the  provisions  of  the  stat- 
utes there  involved.103  But  none  of  those  courts  realized 
that  important  differences  in  rate  regulation  are  constitu- 
tionally possible.  Consequently,  of  course,  none  of  those 
courts  sufficiently  considered  the  question  whether  in  the 
statute  before  it  the  legislature  had  actually  established  defi- 
nite principles  for  the  guidance  of  the  commission  in  nam- 
ing specific  rates.  And  for  that  reason  it  cannot  be  said 
that  that  question  has  been  finally  settled  as  to  any  particu- 
lar statutory  provision. 

It  is  possible,  in  view  of  the  context  in  some  of  the  stat- 
utes, that  the  term  "reasonable  rates"  is  used  to  denote  rates 
which  mark  the  border  beyond  which  charges  by  the  car- 
rier would  be  extortionate,  and  while  there  may  be  some 
doubt  as  to  just  what  would  constitute  an  extortionate 
charge,  it  seems  that  a  grant  of  power  to  name  such  rates 
would  not  be  so  indefinite  as  to  be  unconstitutional.  But 
the  statutes  do  not  appear  to  use  the  word  "reasonable"  in 
any  other  sense  which  is  so  definite  that,  if  interpreted  in 
that  way,  a  grant  of  power  to  name  "reasonable  rates" 
would  be  constitutional.  It  is  true  that  some  courts  have, 
by  way  of  false  analogy,  applied  the  term  "reasonable"  to 
rates  which  were  not  so  low  as  to  be  confiscatory ;  yet  we 
cannot  say  that  the  statutes  in  empowering  the  naming  of 
"reasonable  rates"  intended  to  direct  that  the  rates  should 
be  made  as  low  as  would  be  constitutional.  And  no  one 
who  is  acquainted  with  railroad  transportation  would  assert 
that,  on  principle,  between  the  extremes  of  extortion  and 
confiscation  there  can  be  only  one  rate  which  is  justifi- 
able.104 

While,  however,  a  grant  of  the  power  to  name  "reason- 


"•  See  note  33,  supra. 

104  As  Mr.  Victor  Morawetz  said  before  the  Senate  Committee  on 
Interstate  Commerce  on  April  18,  1905,  "It  is  rarely,  if  ever,  true  that 
there  is  but  one  just  and  reasonable  rate  for  the  transportation  of  a 
given  article  between  two  points.  In  nearly  every  instance  there  is  a 
wide  range  within  which  any  rate  would  be  just  and  reasonable." 


42  RATE  REGULATION  AND  THE  DISTRIBUTION 

able  rates"  is  constitutional  if  that  term  is  used  by  the  legis- 
lature to  enunciate  a  definite  principle  in  accordance  with 
which  the  commission  must  act,  yet  when  that  term  is  inex- 
tricably bound  up  with  other  terms  which  are  indefinite  the 
entire  clause  seems  to  be  unconstitutional.  This  is  true  in 
the  case  of  the  Interstate  Commerce  Act.  And  we  have 
there  not  only  the  language  of  the  statute  itself  but  also 
the  interpretation  which  the  commission  has  placed  upon 
such  language  to  show  that  Congress  has  attempted  to  confer 
upon  the  commission  a  discretion  which  is  so  broad  that 
the  provision  cannot  be  upheld  upon  any  ground  which  is 
not  flatly  inconsistent  with  the  rule  that  legislative  power 
may  not  be  delegated. 

We  have,  for  instance,  the  statement  of  the  commission 
itself  that  "every  case  before  the  commission,  however 
trivial  it  may  appear,  involves  in  its  disposition  the  formu- 
lation of  principles  under  the  law  which  have  important 
bearing  upon  the  business  of  carriers  and  the  commerce, 
not  only  of  the  immediate  locality,  but  often  of  the  entire 
country."  105  And  while  Congress  may  not  have  realized 


105  Sixth  Annual  Report,  (1892)  p.  12.  This  statement  was  repeated 
in  its  Seventh  Annual  Report,  (1893)  p.  13,  the  commission  also  saying 
that  "what  may  sometimes  appear  to  be  unnecessary  delay  in  the  dispo- 
sition of  matters  before  the  commission  is  really  the  taking  of  time  to 
consider  the  effect  of  a  ruling  upon  the  whole  situation  and  beyond 
that  which  might  be  just  as  between  only  the  parties  to  the  record." 
And  in  its  Ninth  Annual  Report,  (1895)  p.  59.  the  commission  said, 
"To  some  extent  the  principles  upon  which  taxation  rests  must  be 
allowed  in  fixing  a  just  rate;  to  some  extent  the  result  of  the  rate 
upon  the  development  of  industries  must  be  taken  into  the  account  in 
all  decisions  which  the  commission  is  called  upon  to  make;  to  some 
extent  every  question  of  transportation  involves  moral  and  social  con- 
siderations, so  that  a  just  rate  cannot  be  determined  independently  of 
the  theory  of  social  progress."  See  also  Fourth  Annual  Report,  (1890) 
p.  6;  Texas  &  P.  Ry.  Co.  v.  Interstate  Com.  Comn.,  (1896)  162  U.  S. 
197,  234,  1 6  Sup.  Ct.  666,  681.  Commissioner  Prouty  said  in  the  Ameri- 
can Monthly  Review  of  Reviews  for  May,  1906,  p.  595,  "Now  the  fixing 
of  a  railway  rate  is  in  its  nature  legislative  rather  than  judicial.  There 
is  no  standard  by  which  it  can  be  determined.  ...  In  determining 
the  justice  or  reasonableness  of  a  particular  rate  all  these  factors,  and 
many  others,  may  present  themselves  for  consideration.  They  are 
properly  taken  into  account  by  the  traffic  official  who  fixes  the  rate  in 
the  first  instance,  and  they  must  be  considered  by  the  administrative 
body  which  revises  that  rate.  It  is  finally  a  question  of  judgment  what, 


OF   POWERS   IN  THE   CONSTITUTIONS  43 

the  indefiniteness  of  its  grant  of  power,  it  is  true  that  a 
consistent  application  of  the  law  involves  the  formulation  of 
important  principles  which  may  affect  fourteen  Jrillion 
dollars'  worth  of  railroad  property;  which  may  affect  one 
and  a  half  million  workmen  and  their  families  who  are 
directly  dependent  upon  railroad  earnings;  and  which  may 
affect  seriously  every  industry  and  every  section  of  the  coun- 
try. And  it  involves  the  formulation  of  those  principles  by 
an  administrative  body  and  not  by  Congress. 

Of  course,  the  executive  department  seeks  such  grants 
of  power.  A  President  who  suspended  the  enforcement  of 
important  laws,  and  who  even  turned  into  a  forest  reserve 
millions  of  acres  of  land  which  Congress  had  expressly 
directed  him  to  throw  open  to  public  settlement,106  does  not 
hesitate  to  ask  for  broad  grants  of  discretion.  The  power 
which  he  secured  for  the  Interstate  Commerce  Commission 
is  no  greater  than  that  which  he  tried  to  secure  for  his 
Commissioner  of  Corporations,  a  power  which  in  the  hands 
of  an  aggressive  person  might  prove  very  useful  during 
political  campaigns — especially  in  the  absence  of  a  law 
requiring  the  publication  of  the  receipts  of  campaign  com- 
mittees— and  perhaps  at  other  times.  And  that  power  might 
constitutionally  be  granted  to  the  Commissioner  of  Corpo- 


taking  everything  into  account,  ought  fairly  to  be  done."  In  the  same 
article  he  declared,  p.  596,  "It  exercises  precisely  the  same  administra- 
tive function  in  correcting  as  does  the  traffic  official  in  establish- 
ing" rates,  with  the  qualification  that  the  commission  considers  more 
than  the  interests  of  the  carrier.  In  connection  with  that  declaration 
should  be  read  his  statement  in  the  same  magazine  for  July,  1906,  p.  65, 
"The  making  of  a  railway  rate  rests  in  the  judgment  of  the  traffic 
official.  Within  very  wide  limits  that  official  could  not  demonstrate  by 
any  legal  standard  and  legal  evidence  that  his  rate  was  right;  neither 
could  the  shipper  demonstrate  by  the  same  methods  that  it  was  wrong." 
106  Other  illustrations  of  executive  usurpation  are  given  in  Pierce, 
Federal  Usurpation,  p.  107  et  seq.  And  see  also  pages  190,  280,  281, 
283,  304,  355,  of  that  book.  It  is  said  that  the  President  also  established 
an  extensive  code  of  laws  for  the  Canal  Zone  without  authority  from 
Congress:  see  Congressional  Record  for  May  26,  1008,  p.  7290.  And 
the  recent  unauthorized  issue  of  bonds  by  his  Secretary  of  the  Treasury 
is  well  known. 


44        THE   DISTRIBUTION   OF   GOVERNMENTAL   POWERS 

rations  if  the  grant  of  power  to  the  Interstate  Commerce 
Commission  is  constitutional. 

Indeed,  if  the  legislature  may  constitutionally  grant  a 
broad  discretion  to  a  railroad  commission,  where  must  it 
stop?  May  not  Congress  delegate  to  a  commission  similar 
power  over  the  tariff  or  over  taxation  in  general?  May 
not  the  state  legislatures  delegate  to  commissions  similar 
power  over  the  criminal  laws?  May  not  the  power  which 
is  granted  to  seven  men  or  five  or  three  be  granted  to  one 
man,107  and  not  upon  one  subject  only,  but  upon  every 
subject  which  now  comes  before  the  legislatures?108 


107  Indeed,  the  President  can  now  control  the  decisions  of  the  Inter- 
state Commerce  Commission,  for  its  members  are  removable  at  his 
pleasure:  see  section  n  of  the  Act. 

"'As  was  said  by  Mr.  E.  B.  Whitney  in  31  Am.  L.  Reg.  186,  "Many 
cases  could  be  put  in  which  the  ruling  party  could,  for  a  considerable 
time,  perpetuate  its  power  in  a  situation  like  that  of  the  second  session 
of  the  Fifty-first  Congress.  President,  Senate  and  House  of  Repre- 
sentatives then  belonged  to  the  same  political  party,  and  had  it  in  their 
power  to  make  the  laws.  They  knew  that  on  the  fourth  day  of  March 
then  next  ensuing  the  opposition  would  obtain  control  of  one  branch 
of  Congress,  so  that  for  two  years  party  legislation  would  be  impossible. 
If  a  Congress  has  an  unlimited  right  of  delegation,  a  series  of  acts 
could  easily,  and  might  in  the  future,  perhaps,  not  improbably,  be 
passed,  which  should  secure  to  the  President  the  right  of  legislation 
during  those  two  years,  while  the  ensuing  Congress  would  simply  and 
easily,  by  the  ordinary  parliamentary  processes,  be  stifled  in  a  deadlock. 
Thus  the  power  to  delegate  involves  the  power  to  create  a  limited 
dictatorship." 


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SEP  5    1940 

OCT      .0       * 

stir  6  jy4o 

$6i>  7m 

1lMar'57BPF 

RECTO  LD 

F 

24Apr'57F?n 

REC'D  LD 

APR  14  1957. 

LD  21-100m-7,'39(402s) 

YC  25623 


185002 


r< 


